While regulatory changes are likely to have had mixed effects on market liquidity, several structural drivers, such as, concentrated holdings by institutional investors, growth of electronic platforms and high frequency trading, reduced market making, etc. have also played a part. 33. We will have to assess the implications of these factors, including the emerging regulatory regime, on corporate bond market development.
While it is recognized that the regulatory regime may need to respond positively to some of the critical issues unless the structural factors mentioned earlier are addressed, it would be difficult to have a deep corporate bond market.