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Finshots Daily

SEBI unlocks the CDS market for Mutual Funds

Jun 12, 2024
07:03
Snipd AI
SEBI is proposing to open the CDS market for Mutual Funds, exploring the benefits of corporate bonds for fundraising. Efforts to expand India's corporate bond market using CDS and mutual funds to manage risk and boost investor confidence.
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Podcast summary created with Snipd AI

Quick takeaways

  • Corporate bonds offer lower interest rates and protect management control.
  • SEBI's move to allow CDS in mutual funds improves risk management and investor confidence.

Deep dives

Benefits of Corporate Bonds Over Other Financing Options

Companies have various methods to raise funds such as bank loans or issuing shares, each presenting its own challenges like high interest costs or dilution of management control. To address these issues, companies can opt for corporate bonds, allowing them to borrow from the public with fixed interest payments and minimal impact on management control. This alternative offers lower interest rates than bank loans and avoids diluting management control over decision-making, making it a favorable choice for companies.

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