SEBI (AIF) (Second Amendment) Regulations, 2023 introduced a new category of Alternative Investment Fund (AIF), viz. Corporate Debt Market Development Fund (CDMDF). Explain in brief the framework for CDMDF as prescribed

SEBI introduced Corporate Debt Market Development Fund (CDMDF) vide SEBI (AIF) (Second Amendment) Regulations, 2023, is a new category of AIF in which investments shall be made in accordance with Chapter II C of these Regulations. It acts as a Backstop Facility for purchase of investment grade corporate debt securities to instill confidence amongst the participants in the Corporate Debt Market during times of stress and to generally enhance secondary market liquidity by creating a permanent institutional framework for activation in times of market stress. The fund shall deal only in following securities during normal times: Low duration Government Securities Treasury bills Tri-party Repo on G-sec Guaranteed corporate bond repo with maturity not exceeding 7 days. Registration of CDMDF CDMDF shall be structured as a trust and its establishment requires the execution of a registered deed in accordance with the provisions of Indian Registration Act of 1908. The CDMDF shall operate as a close ended fund, meaning that it has a pre-determined duration of 15 years, from the date of initial closing. CDMDF are made available for investment to asset Management Companies (AMCs) and specified debt-oriented schemes of mutual funds. The SEBI vide circular dated July 27, 2023 prescribed the framework for Corporate Debt Market Development Fund (CDMDF) which states that CDMDF shall comply with the Guarantee Scheme for Corporate Debt (GSCD) as notified by Ministry of Finance vide notification no. G.S.R. 559(E) dated July 26, 2023, which includes the Framework for Corporate Debt Market Development Fund. In addition to the scheme, CDMDF shall comply with the conditions as mentioned in the circular. Investment Conditions: During periods of market dislocation, the Corporate Debt Market Development Funds shall purchase corporate debt securities from the specified debt-oriented schemes of mutual funds which meet the following eligibility criteria: corporate debt securities shall be listed and have an investment grade rating; the residual maturity of such securities shall not exceed five years on the date of purchase; securities where there is no material possibility of default or adverse credit news or views. Disclosure Norms: The portfolio of the CDMDF will be made available to the unitholders on a fortnightly basis. Additionally, the net asset value (NAV) of the CDMDF will be disclosed to the unitholders on a daily basis. These regular disclosures ensure transparency and provide timely information to the unitholders regarding the fund's holdings and NAV. Compliance with governance mechanism: The CDMDF will select and appoint a trustee company. The appointment of both the board of directors of the trustee company and the manager of the CDMDF necessitates prior approval from SEBI. The trustee company is authorized to engage solely in activities where it acts as the trustee of the CDMDF, unless prior written consent is obtained from SEBI. In terms of composition, two-thirds of the members on the board of the trustee company must be independent directors who do not have any affiliation with the sponsor or manager. The appointment of any individual as a director of the trustee company is subject to the prior approval of SEBI. Furthermore, an audit committee must be established within the trustee company to oversee and assess compliance with the provisions outlined in the placement memorandum.