Scheme for trading and settlement of sovereign green bonds (SGrBs) in IFSC has been introduced by RBI

Scheme for trading and settlement of sovereign green bonds (SGrBs) in IFSC has been introduced by RBI.
The scheme covers investments in sovereign green bonds issued by the Government of India to eligible investors in the IFSC in India.
Investors can take part in the primary auctions of securities carried out by the Reserve Bank.
Investors can transact in the secondary market for securities in the IFSC.
As part of the scheme, investors are not allowed to repackage or write any derivative instrument on underlying securities they hold.
They also are not allowed to undertake repo transactions in such securities.
Eligible IBUs are not allowed to take part in the primary auctions under the scheme.
However, they are allowed to take part in the secondary market.
IBUs (IFSC Banking Units) are banking units set up in the IFSC.
Investors are allowed to conduct trade in the secondary market in the IFSC with other investors and eligible IBUs.
However, transactions between two eligible IBUs are not allowed.
Eligible IBUs are allowed to trade with investors such that the transactions will be carried out on a ‘back-to-back’ arrangement.
As per the RBI, the scheme will come into force with immediate effect.
IFSC Authority will issue the operational guidelines for participation in the scheme by entities in the IFSC.