₹33,000 crore fund, created by pooling money from mutual funds’ debt schemes, aims to provide liquidity to debt schemes during periods of market stress. The AMC Repo Clearing Ltd (ARCL), on the other hand, is a limited-purpose clearing corporation backed by Sebi and funded by asset management companies.
It will offer clearing and settlement services to all trades executed on the NSE and BSE under tri-party repo in corporate debt securities. Under the tri-party repo, a licensed financial institution facilitates a repo transaction between two parties, wherein one borrows against corporate bonds as collateral.
The platform will help all regulated entities—AMCs, insurance companies, market makers, and short-term traders—take positions and manage their risks in listed corporate bonds and debentures, commercial papers, and certificates of deposit. Further, Sitharaman said she asked financial market regulators to focus on quality, proportionality and effectiveness of regulations to make it easier for companies to do business.
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