Finance Minister Nirmala Sitharaman has launched two significant institutions in the financial sector, aiming to boost India’s economic growth and enhance market stability. The institutions include AMC Repo Clearing Limited (ARCL) and the Corporate Debt Market Development Fund (CDMD), both organized by the Securities and Exchange Board of India (SEBI).
ARCL, established in April 2021, has received in-principle approval from SEBI under the Stock Exchanges and Clearing Corporations (SECC) Regulations, 2018. It serves as a Central Counter Party (CCP) that provides clearing and settlement services for corporate debt securities traded on the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE).
The CDMD Fund, on the other hand, will function as an Alternative Investment Fund (AIF) under SEBI’s (Alternative Investment Funds) Regulations, 2012. Its primary purpose is to act as a Backstop Facility, instilling confidence in participants within the Corporate Bond Market during challenging economic conditions.
During the launch event, Sitharaman emphasized the importance of the financial sector in gauging a country’s macroeconomic fundamentals and growth potential. She also highlighted the manifold reforms implemented in the financial sector, leveraging technology to achieve financial inclusion and transparency across various segments of the financial ecosystem.
The Finance Minister stressed the significance of quality, proportionality, and effectiveness in financial regulations, promoting ease of doing business, ease of investing, and ease of living. Striving for a balanced approach, the regulatory environment aims to create a conducive atmosphere for businesses while ensuring market integrity and stability.
Sitharaman expressed her pride in India’s financial market ecosystem, which ranks among the best globally in terms of technology, trading volume, and value. The collaborative efforts between market participants, regulators, the government, policymakers, and legislators pave the way for a robust financial market system, propelling India towards becoming a developed nation.
Madhabi Puri Buch, the Chairperson of SEBI, recognized the government’s commitment to bond market development as a catalyst for the creation of institutions like the Corporate Debt Market Development Fund and the limited-purpose clearing corporation.
The launch of these institutions reflects a robust growth trajectory for India’s financial sector. With a focus on technology, transparency, and market stability, the initiatives seek to strengthen confidence among market participants, foster economic growth, and establish India as a leading global financial hub.
