The Securities and Exchange Board of India (SEBI) has introduced a new liquidity window facility with the aim of improving the bond market for retail investors.

This facility allows bond issuers to repurchase bonds from investors, functioning similarly to a put option. As a result, investors will have an easier way to access their funds.

The introduction of this facility is expected to encourage more participation from retail investors, as the increased demand will make it more useful. Managed funds that invest in bonds will also benefit from this liquidity window, which could lead to a more dynamic bond market.

The success of this facility depends on how retail investors incorporate bonds into their portfolios, indicating a significant change in the investment landscape.