A new Wholesale Corporate Bonds Regulation issued by the Reserve Bank will now guide Fijian businesses wishing to raise funds through bonds. [File Photo]

A new Wholesale Corporate Bonds Regulation issued by the Reserve Bank will now guide Fijian businesses wishing to raise funds through bonds.

This will also make Fiji’s finance sector more competitive.

RBF Governor, Ariff Ali says with the ongoing COVID-19 crisis and its impact on businesses, the development of the corporate bond market and it’s potential to provide a new source of financing for projects is a timely policy intervention.

Ali says this new initiative will assist firms diversify their options for raising finance, reduce dependence on a single funding source and improve the competitiveness of the financial sector.

IFC, a member of the World Bank Group, conducted a study on Fiji’s corporate bond market in 2019 and found that while there was a thriving government bond market, there had been no issuances of corporate bonds in recent years.

The study also found that to have a functioning corporate bond market, there were legal and regulatory gaps that needed to be addressed.

The Companies (Wholesale Corporate Bonds) Regulations 2021 provides a simplified process for the issuance of corporate bonds to eligible wholesale investors only and ensures there is significant transparency before and after the bonds are issued to limit risks to investors.