The Hindu Business Line : `Securitised debt instruments

Kolkata June 23 The corporate bond market is a big affair globally and this may well be the time for the Indian market to deepen further, the Bombay Stock Exchange, the oldest in the country, has suggested.

The exchange has taken note of the securities regulator's recent move on the public offer and listing of securitised debt instruments, Mr Rajnikant Patel, MD & CEO, BSE, said in this context.

The reference is to the Securities Contracts (Regulation) Amendment Act, 2007, which has been passed to provide a framework for enabling listing and trading of securitised debt instruments. The amendmentprovides for a new sub-clause to include securitisation certifications or instruments in the definition of securities. There is also a new section to provide for a disclosure-based regime for public issue and listing of such securitised debt instruments.

Issuers intending to offer certificates or instruments to the public will need to make an application to one or more recognised stock exchanges for securing listing.

SEBI, which has felt that for effective regulation, registration of the issuers may be "beneficial", has indicated that listing of privately placed securitised debt instruments will be permitted on a case-to-case basis. The general rule will be that only publicly issued instruments will be listed.

Plans to raise capital

On another front, the BSE may weigh the possibility of raising capital from the market in order to further its business plan, Mr Patel told newspersons here, indicating that the finer details of the plan are not being disclosed at the moment.

The exchange, which has underlined the fact that it has a cash reserve of Rs 1,000 crore, has recently wrapped up the process of demutualisation, mandated by SEBI.

The BSE, which was required to ensure that at least 51 per cent of its equity is held by public other than shareholders with trading rights, has entered into tie-ups with Deutsche Borse and Singapore Exchange. Also, shares tendered by trading member-shareholders have been placed with a clutch of investors, both local and foreign.

The latest ownership structure implies that the exchange is in a position to actively tap growth opportunities, Mr Patel said. The fresh issue and placement of shares tendered in the BSE's offer for sale programme were priced at over Rs 5,000 per share. This resulted in the BSE's market capitalisation at about $ 1 billion, it is pointed out.

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