SEBI-RBI pilot to test bond tokenisation for faster settlement

A separate market-making framework, proposed in the Union Budget 2026-27, is under design. The market has nearly 33,000 outstanding instruments across 7,200 issuers, creating a fragmentation challenge. Singh said SEBI is examining how issuers can be concentrated in fewer benchmark issues, along with measures such as issuer buyback, liquidity support and further development of the request-for-quote platform.

On the distribution side, SEBI plans to allow online bond platform providers to appoint certified channel partners. Existing mutual fund distributors would also be able to participate. The proposed channel partners would be certified through the National Institute of Securities Markets and would not handle bank funds or securities or charge investors separately, Singh said. “Broadening participation will require an effective and responsible distribution architecture,” he said.

A consultation paper on the distribution framework is expected soon, according to Singh. The regulator is separately working on risk disclosure, including a graded risk-o-meter for bonds.

Singh said these measures are aimed at making the corporate bond market “deeper, more liquid, diversified, accessible and trusted.”