Sebi plans composite measures to boost bond market

Sebi plans to have a common regulation criteria for mutual funds, insurance companies and pension funds in terms of investing in corporate bonds.

The move is part of continuing efforts to deepen the corporate bond market.

"We are working on a common regulation criteria for investments by mutual funds, insurance companies and pension funds in bonds," Sebi Chairman Ajay Tyagi said here today.

Earlier this week, the Sebi board approved a new framework for consolidation and reissuance of debt securities.

With the move, liquidity in the secondary market for corporate bonds will be increased by way of minimal number of ISINs (International Securities Identification Numbers). ISINs are used to number specific securities.
 

Talking about plans of Sebi, Tyagi, who took charge last month, said the regulator intends to focus on the primary market in terms of bringing in more investments to the companies so that they can invest in infrastructure and other areas.

"We want further reforms in IPOs and corporate bond market. We will try to reduce the listing time," he added.

Furthermore, Tyagi said that at least two or three InVITs (infrastructure investment trusts) are expected in coming months.

"We have been promised that at least three municipalities will soon raise these (municipal) bonds and once this starts, it will be a big boost for alternative channel for investments," he added.

With the stock markets posting strong rallies in recent days, Tyagi said the trend is not much of bubble effect, but something based on strong fundamentals.

"This is on the basis of strong macro fundamentals of the country in terms of GDP growth, in terms of inflation control, fiscal deficit, CAD control and commodity prices (being) low," he noted.

Speaking at an event organised by industry body CII, the Sebi chairman said constant push for reforms by this government in the last three years has been bearing fruit.

However, he flagged concerns about "increasing protectionism and attempts to de-globalise", saying it will definitely affect the global economic growth and may have a contagion effect.