Mutual fund-borrower standstill pacts not recognised: Sebi's Ajay Tyagi

As part of the 'standstill' agreement, the debt would not be declared as default, despite the drop in value of the underlying shares

Markets regulator Securities and Exchange Board of India (Sebi) has reiterated that the so-called standstill agreement between mutual funds (MFs) and borrowers doesn’t have regulatory blessing.

“It is not there in any of the regulations. We have made our position clear. Entities have to follow the regulations that are there. There is no confusion in that,” said Ajay Tyagi (pictured), chairman of Sebi, on the sidelines of a capital market conference organised by the industry body FICCI. The comments on a ‘standstill’ have come a day after the Essel group said it has obtained fresh extension to honour its debt obligations