Speak now

SEBI plans to set up a ‘backstop entity’ to buy illiquid investment-grade corporate bonds from mutual funds in a bid to reduce the stress in debt schemes. A backstop will ensure that a part of the offering is purchased if it goes unsold. “The backstop facility would be an entity, which can trade in relatively illiquid investment-grade corporate bonds and be readily available in times of stress to buy such bonds from participants in the secondary market,” SEBI Chairman Ajay Tyagi said at the 25th AGM of the Association of Mutual Funds in India (AMFI) on Tuesday.