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ARTICLE · 08 NOVEMBER 2024

SEBI Introduces Liquidity Window Facility

Argus Partners
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The Securities Exchange Board of India ("SEBI") vide circular dated October 16, 2024 ("Circular"), has introduced a uniform framework for a Liquidity Window facility...

IndiaFinance and Banking
Aastha
Aastha
Nalin Malhotra
Nalin Malhotra
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The Securities Exchange Board of India ("SEBI") vide circular dated October 16, 2024 ("Circular"), has introduced a uniform framework for a Liquidity Window facility ("LW Facility") for investors in debt securities.

In the Circular, SEBI has noted that the secondary corporate bond market has been perceived to have limited liquidity due to a large number of institutional investors holding corporate bonds till their maturity. Issue of liquidity for investors, especially retail investors, is one of the issues that the LW Facility aims to address. As per Regulation 15 of the SEBI (Issue and Listing of Non-Convertible Securities) Regulations, 2021 ("ILNCS Regulations"), an issuer of debt securities which are proposed to be listed ("Issuer") can provide the right to redeem such securities by way of a put option, to all investors or only to retail investors, prior to the maturity date of such securities.

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