Sebi in process to finalise modalities to set up backstop facility for corp debt market

Capital markets regulator Sebi is in the process of finalising the modalities to set up a "backstop facility" for the corporate debt market. In addition, the regulator is mulling to revamp the corporate bond database, which will be accessible to all investors, Sebi said in its annual report for 2020-21.

This database will make available more granular level information about debt covenants to investors in the debt market, it added.

The backstop facility will be an entity that can trade in relatively illiquid investment-grade corporate bonds and be readily available in times of stress to buy such bonds from various market participants in the secondary market.