SEBI, RBI working on bond tokenisation project; pilot to test faster settlement

The Securities and Exchange Board of India (SEBI) is advancing a pilot project on the tokenisation of corporate bonds in collaboration with the Reserve Bank of India. This initiative aims to assess whether shared data can facilitate simultaneous securities transfers, thereby enhancing settlement efficiency and reducing reconciliation costs. Additionally, the pilot will explore the feasibility of automated coupon payments and other servicing events through smart contracts. SEBI Whole-Time Member Amarjeet Singh emphasized that the project is not about creating a separate trading market but about leveraging technology to simplify, accelerate, and improve the existing bond market. Beyond tokenisation, the regulator is focusing on deepening the corporate bond repo market and addressing liquidity challenges in the secondary market. To address fragmentation, SEBI is examining measures to concentrate issuers in fewer benchmark issues and developing a formal market-making framework. The regulator is also developing a distribution framework to broaden access to corporate bonds, allowing online bond platform providers and mutual fund distributors to participate. These efforts are complemented by initiatives to enhance risk disclosure, such as a graded risk-o-meter, to make the corporate bond market deeper, more liquid, and trusted.

(Source：The Hindu - Business Line)