SEBI, the regulatory body for the securities market in India, has recently announced the creation of the Corporate Debt Market Development Fund (CDMDF).

• It comes in the form of an Alternative Investment Fund (AIF).  It will be backstop facility for the purchase of investment grade corporate debt securities in times of stress or in case of market dislocation.
• The purpose of this fund is to bring about confidence in corporate bond market and boost secondary market liquidity.
• The initial corpus of CDMDF is Rs 3,000 crore, which will be contributed by mutual funds. The proposed fund will be built through contributions from specified debt-oriented mutual fund schemes and asset management companies.
• The government has also permited a 10x usage of this corpus. This takes the available fund to Rs 33,000 crore.