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NSE Enables Tokenised Corporate Bond Issuances
The National Stock Exchange of India (NSE) enables tokenised corporate bond issuances worth a combined ₹1,000 crore. The transactions are conducted under the Securities and Exchange Board of India’s (SEBI) Regulatory Sandbox Framework with guidance and support from the Reserve Bank of India (RBI), marking an early regulated application of tokenisation in India’s corporate bond market.
Tokenised Corporate Bond Issuances:
| Dimension | Key Details |
|---|---|
| Market context | The transactions mark an early application of tokenisation in India’s regulated corporate bond market. |
| Participants | The issuance sees participation from banks, financial institutions, mutual funds, and depositories. |
| Tokenisation mechanism | Tokenisation provides for securities to be represented and managed digitally using Distributed Ledger Technology (DLT). |
| DLT record-keeping | DLT provides for digital records of securities to be maintained across a distributed network. |
| Designed process outcomes | The technology is designed to facilitate atomic settlement, improve transparency, and enhance operational efficiency across the securities lifecycle. |
| Settlement infrastructure | The system uses India’s existing digital settlement infrastructure, rather than requiring a separate settlement framework. |
| Sandbox role | The framework provides the regulatory setting for testing tokenisation technology within India’s existing capital-market infrastructure. |
| Corporate bonds: issuer types | In India, corporate bonds comprise fixed-income debt instruments issued by public and private companies, banks, and financial institutions to raise capital for operations, expansion, or refinancing. |
| Corporate bonds: investor position | Buying a corporate bond provides for lending money to a company, not ownership in the company. |
| Corporate bonds: returns and repayment | The company promises to pay a fixed or floating interest rate called the coupon at specified intervals and to return the principal at maturity. |
| Corporate bonds: liquidation claim | Bond investors are creditors and have a prior claim on the company’s assets compared to equity shareholders in the event of liquidation. |
| Corporate bonds: common Indian terms | In India, corporate bonds are also widely known as Non-Convertible Debentures (NCDs) when issued to the public, or commercial paper and bonds in the institutional market. |
| Regulator | SEBI regulates listed securities in India’s corporate bond market. |