MUMBAI — Recent regulatory measures by the Securities and Exchange Board of India (SEBI), including penal actions against market entities for price spikes during specific trading windows, send a strong signal regarding market integrity. This was stated by Kamlesh Shroff, President of the Association of National Exchanges Members of India (ANMI).
Speaking on the sidelines of the ASSOCHAM IX National Summit & Awards on Corporate Bond Market in Mumbai, Shroff noted that widening market breadth and enhancing price discovery across asset classes remain vital for India’s financial ecosystem. Commenting on the penalty levied on entities involved in price spikes during recent trading windows, he remarked that the regulatory action demonstrates how closely SEBI is monitoring market activities.
Addressing the impact of extended post-close trading windows on Consolidation and Settlement (CAS) mechanisms, Shroff stated that allowing wider order placements expands overall depth. He explained that orders placed between 3:20 PM and 3:50 PM enter the system to create a larger depth, leading to better price discovery during matching.
Shroff also observed that SEBI is taking a comprehensive view of exchange operations and monitoring structural shifts carefully, particularly around major market expiries.
During the summit, the ANMI President welcomed initiatives outlined by SEBI Whole Time Member Amarjeet Singh, specifically highlighting the Fixed Income Channel Partners (FICP) framework via NISM and the riskometer concept. According to Shroff, channel partners play an important role in growing businesses by advising and creating awareness across different geographic pin codes. Regarding the riskometer, he noted that it effectively illustrates the varying risks between AAA-rated and BB or C-rated instruments, enabling larger players to build structured debt portfolios.
Discussing Online Bond Platform Providers (OBPP) and technology-led tokenisation, Shroff pointed out that OBPP platforms currently host between 15 lakh and 17 lakh investors, helping bridge a market that has historically been dominated by institutional players. He added that tokenisation improves market depth and breadth by allowing participants to buy smaller fractions of specific debt items.
On the broader issue of corporate bond liquidity, Shroff highlighted that institutional dominance at 95 percent creates structural friction for the remaining 5 percent retail base. He emphasized that liquidity remains central to efficient functioning, noting that newly introduced market platforms require adequate time to mature and build secondary market liquidity to prevent disadvantages in pricing.
"Regulatory vigilance and enhanced transparency are critical for the long-term maturation of India's financial markets. As platforms bridge the gap between institutional dominance and retail participation through innovations like OBPPs and tokenisation, market integrity remains paramount. Strengthening retail reach via structured channels and clear risk metrics will ultimately drive sustainable growth and depth in the corporate bond ecosystem." — Dr. Shishir Gupta, Founder & CEO, StartupLanes
