On its part, SEBI has also proposed allowing re-issuance of existing debt securities by a corporate issuer within a specified time period rather than launching a new issue.
   
This would help create large stocks in any given issue, thereby helping to create secondary market liquidity.
   
In his budget speech in July, Finance Minister Arun Jaitley had said that the financial sector regulators need to "take early steps for a vibrant, deep and liquid corporate bond market".
    
Taking forward this agenda of development of corporate bond market, SEBI  has taken up several issues with various regulators and departments, a senior official said.
 
Among others, SEBI has taken up with the Corporate Affairs Ministry the issues faced by issuers of corporate bonds relating to the applicability of certain provisions of the new companies law.
   
The issues raised with RBI include revising guidelines for private placement by NBFCs with regard to the number of investors, and use of capital markets for raising funds through debt and hybrid instruments for banks to meet capital requirements under Basel III norms.
   
Besides, SEBI has also discussed with RBI the issue of allowing banks and primary dealers to act as market makers in corporate bond segment and providing funding to PDs for this purpose, as also the matters relating to reporting of trades in Commercial Papers and Certificates of Deposits on the stock exchanges.
    
Sources said that RBI has responded favourably to many suggestions and necessary action has been initiated already in some cases, but the central bank is not keen on allowing Pds to act as market makers and in permitting reporting of trades in CPs and CDs on stock exchanges.
   
SEBI had also written to RBI to make trading in corporate bonds on stock exchange platform mandatory in a phased manner.
   
However, RBI is of the view that exchanges should work with market participants to make exchange platforms a preferred mode for such transactions, rather than making it mandatory.
   
SEBI has also requested RBI to consider enabling trading members in the debt segment of stock exchanges to borrow funds to provide market making in the corporate bond market.
    
The capital markets regulator also proposed a common reporting platform for all securitised debt instruments, for which RBI is the main regulator and which are mostly issued by RBI-regulated banks and NBFCs.
   
SEBI has also written to RBI, IRDA, PFRDA and EPFO to rationalise the investment restrictions on the entities regulated by them, while it has asked Finance Ministry to look into taxation issues for securities debt instruments.

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