SEBI Simplifies Rules for Corporate Bond Cash Flow Disclosures

On May 18, the Securities and Exchange Board of India (SEBI) announced new rules for cash flow disclosures in the corporate bond database. This move is aimed at making bond trading smoother and more transparent for market participants.

As per SEBI’s latest circular, the changes come after a detailed review of the Request for Quote (RFQ) platform framework. The goal is to simplify how trades are executed and how yields are calculated.

What Has Changed in Yield-to-Price Calculation, as Per SEBI?

SEBI has simplified the way "yield-to-price" is calculated for trades on the RFQ platform. Until now, the calculation required detailed adjustments based on the actual payment dates and day count conventions. This made the process complicated.

From now on, the yield will be calculated using the scheduled due dates mentioned in the cash flow schedule, not the actual payment dates. This change is expected to make trading easier and more uniform for investors and issuers alike.

Mandatory Cash Flow Disclosure in Bond Database

SEBI has also introduced a new rule requiring all issuers of corporate bonds to disclose a detailed cash flow schedule. This includes all expected payments like interest, dividends, or the redemption amount.

Issuers must submit this cash flow information when the ISIN (International Securities Identification Number) is activated and again after the securities are listed. Any changes in the schedule must be updated within one working day to ensure transparency.

This information will be stored in the centralised corporate bond database and must be updated regularly.

When Do These New Rules of SEBI Begin?

These new SEBI regulations will come into effect from August 18, 2025. They will apply to all new debt securities issued after this date. For existing ISINs, the rules will apply for the remaining time until maturity.

What is the RFQ Platform?

The RFQ platform was launched by BSE and NSE in February 2020. It allows users to conduct multiple negotiations for debt securities on a central online system. It also ensures smooth clearing and settlement of trades.

Conclusion 

SEBI’s latest changes aim to improve the ease of doing business in the bond market. By simplifying yield calculations and mandating regular cash flow disclosures, the regulator is promoting more trust, transparency, and investor participation in India’s debt market.
 
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