SEBI Focuses On Transparency, Simplifies Cash Flow Disclosure In Corporate Bond Database

In a move aimed at enhancing transparency and operational ease, the Securities and Exchange Board of India (SEBI) has overhauled certain provisions under the Request for Quote (RFQ) platform framework.

The market regulator has not only simplified the calculation methodology for yield-to-price but also introduced mandatory cash flow disclosures for corporate bonds listed in the centralised database, reported PTI.

According to the latest circular, the yield-to-price computation on the RFQ platform will now rely solely on the scheduled due dates mentioned in the cash flow schedule, eliminating the need to reference actual payment dates. “This move is aimed at streamlining and simplifying the process of trade execution on the RFQ platform,” the regulator noted.

This is a notable shift from the earlier system where debt security yields were calculated using actual payment dates and day count conventions. With the new approach, yield computation becomes more straightforward, potentially boosting trade efficiency on the platform.

New Rules on Cash Flow Transparency

Alongside simplifying yield calculations, SEBI has mandated issuers of debt securities to disclose a detailed cash flow schedule in the centralised corporate bond database. These disclosures must include information on interest, dividend, or redemption payments and should be made available both during ISIN activation and after the securities are listed.

To ensure data integrity, SEBI has stipulated that any changes in the cash flow schedule must be updated within one working day. “These new regulations will be applicable to all new debt security issues starting August 18, 2025, and also to existing ISINs for their remaining maturity,” Sebi said in its circular issued on Friday.

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RFQ Platform’s Role and Reach

Launched in February 2020 on the BSE and NSE, the RFQ platform facilitates multi-lateral negotiations in a digitised and centralised manner. It also ensures straight-through processing for clearing and settlement, enabling smooth and transparent trade execution.

The platform currently supports a wide range of debt securities, and the latest regulatory changes are expected to further enhance its utility by standardising key trade metrics and improving the quality of information available to market participants.

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