View: Let the swap market bloom

Ever since the 2008 financial crisis, CDSs have evoked a negative perception. In India, mutual funds (MFs) are permitted to buy CDS to hedge risk on corporate bonds held in fixed maturity plans (FMP) having a tenor of more than one year. Sebi is mulling whether MFs should be allowed to buy CDS to hedge credit risk on debt securities held in all their schemes.
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