Inside Nomura’s India Bond Probe: Surge in STRIPS Trading Raises Eyebrows

Updated: November 17, 2025 09:37

Image Source : Trade Brains

Nomura Holdings Inc. is probing its India bond trading desk following an unusual spike in STRIPS trading activity. The investigation focuses on whether the desk inflated profits by marking positions to theoretical prices that did not reflect actual market liquidity, raising regulatory and market concerns.

Nomura Holdings Inc, Japan’s leading brokerage firm, has launched an internal probe into its India bond trading desk amid a significant surge in STRIPS (Separate Trading of Registered Interest and Principal Securities) trading volumes. Authorities and internal auditors are scrutinizing whether traders manipulated trade valuations by referencing theoretical prices disconnected from real market liquidity.

STRIPS trading involves splitting a bond into its principal and interest components, creating zero-coupon securities. This area has attracted heightened activity recently due to regulatory and market dynamics in India’s debt market.

The probe comes shortly after similar regulatory investigations in Japan concerning bond market manipulation by Nomura’s traders. Investigators are examining if profit margins on the India desk were inflated, impacting market fairness and investor trust. Nomura has expressed commitment to cooperation and transparency as it works with regulators and tightens its oversight to prevent recurrence.

This development underscores rising scrutiny on bond trading desks globally amid increased volatility and complexity in fixed income markets. Market participants await further updates on regulatory responses and potential financial impacts on Nomura.

Key Highlights

Nomura Holdings probes India bond desk due to surge in STRIPS trading and possible profit inflation via theoretical price marking.

STRIPS trading involves trading separately the principal and interest portions of bonds, recently seeing unusual spikes in India’s debt market.

The investigation follows past scrutiny of Nomura for bond market manipulation in other jurisdictions.

Nomura pledges full cooperation with regulators and to implement stronger compliance controls to mitigate risks.

Market observers view this as part of a broader regulatory trend monitoring fixed income market integrity amid volatility.

Sources: Bloomberg, Reuters, Marketscreener, Nomura Media