India's markets regulator has allowed mutual funds to both buy and sell credit default swaps (CDSs) under certain conditions, it said in a circular on Friday, in a bid to drive up liquidity in the corporate bond market.

India’s capital market regulator has barred Axis Capital Ltd. from acting as a manager for new offerings of debt by Indian companies, the latest crackdown in the country’s securities market.

Credit Default Swaps (CDS) can be likened to insurance contracts within the market realm, serving as a safeguard against a borrower's default. These financial instruments play a crucial role in helping mutual funds effectively navigate and mitigate risks.

India's markets regulator on Thursday barred investment bank Axis Capital from acting as a merchant banker for new debt issues for allegedly violating rules, according to an interim order on the regulator's website.

Markets regulator Sebi on Friday allowed mutual funds to both buy and sell Credit Default Swaps (CDS), a move aimed at increasing liquidity in the corporate bond market. This flexibility to participate in CDS would serve as an additional investment product for mutual funds,

The Securities and Exchange Board of India (Sebi) on Friday allowed mutual funds to participate as both buyers and sellers in the credit default swap (CDS) segment, providing greater flexibility to boost liquidity in the corporate bond market.