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SEBI favours Bond Index

MUMBAI: In order to strengthen the domestic derivatives market and provide more risk mitigating instruments to investors, the Securities and Exchange Board of India on Friday asked stock exchanges to set up a Bond Index.

“It has been decided that, to begin with, exchanges shall construct a Bond Index (both corporate and government) and disseminate the same,” SEBI said in a circular.

Based on the experience gained and awareness generated, SEBI said derivatives on the index will be introduced to expand investment opportunities in the futures and options segment. The direction follows SEBI’s earlier decision to introduce seven new products in the F&O segment of the market. The exchanges could opt for either globally available model or develop their own model for computing the Bond Index.

However, SEBI added, it would be mandatory for the exchanges to disseminate the method of computation of the index to the investors. — PTI

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