Mumbai, May 24: The National Stock Exchange (NSE) is set to kick off its retail debt market (RDM) segment in July. The segment will provide for a retail debt window where small lots of corporate debt paper would be available for the investors to trade in. The quotes of retail segment would be displayed and transacted on the equity screen itself.The trading lots which will be available to investors would be as low as 10 units. Exchange sources said that the trials on the settlement systems for the segment are nearing completion and by July the exchange should be in a position to kick-off the segment. The exchange expects a large number of retail investors flocking to the segment as they would now be able to trade in small lots of corporate debt paper.
With the setting up of the retail segment all the instruments listed on the wholesale debt segment of the bourse would be listed on the retail segment as well, thus catering to the needs of both categories of investors.
However, the debt instrumentslisted on the equity segment of the exchange would be shifted to the RDM segment.
The advantage in doing this are two. All members of the bourse and not just those of the wholesale debt market segment would get an opportunity to trade in corporate debt. Secondly, this would lead to one uniform segment where corporate debt could be listed. Currently while a certain set of corporate debt instruments are listed on the equity segment of the bourse there are others which have found listing on the wholesale debt market segment, leading to confusion owing to lack of uniformity. The WDM segment would continue but under the RDM segment all corporate debt paper would be traded in small lots.
``To start with we expect only trading in corporate debt but subsequently once the move catches on we could have successful trades in government securities and other debt instruments,'' said a source.
Sources indicated that the work on the project has been on for the past few months and stems pertaining to the settlementmechanism are currently being put in place. There has been a slight delay owing to the exchange being caught up with implementation of the systems for derivatives trading as well as upgrading its systems.NSE has been a major votary for a boost in the secondary market for debt as it views this as being the market of the future as it will provide an opportunity to corporates to raise large amounts of funds for financing huge projects.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
