Sebi diktat hits commercial papers; traded volume slips to Rs 34,659 crore

Experts say the Sebi rule has played a part but it is also a reflection of the funding crisis that NBFCs are going through.

The mutual fund (MF) industry, which has been steadily bringing down its exposure to commercial papers (CPs) issued by non-banking financial companies (NBFC), seem to have further shunned the paper after a diktat by the capital market regulator to invest only in those that are listed with the exchanges.

CPs are short-term debt instruments maturing in less than a year, and are issued by companies other than banks. The Securities Exchange Board of India (Sebi) had in December notified the rule, making it mandatory for MFs to invest in listed CPs only. 

However, the move was announced first in August