Corporate bond norms by Sept; investors on right path with MFs: Sebi chief

Sebi chief adds that LTCG tax to have minimal impact on Indian markets; global factors pose greater risk

Sebi will soon come out with norms on corporate bonds to encourage firms to tap this route for raising funds, Chairman Ajay Tyagi said on Saturday.   

The Sebi chairman said that the government's proposal to mandate listed companies to raise 25 per cent funds from corporate bonds was a good step and that detailed rules would be issued by September.

Finance Minister Arun Jaitley on Saturday asked markets regulator Sebi to take more steps to deepen the corporate bond market and hoped that continuing uptrend in IPOs will help in meeting the disinvestment targets.

The board of Sebi apprised Jaitley about the market trends and recent initiatives taken by it.

Jaitley addressed the market regulator's board in a customary post-Budget exercise.

Tyagi said the finance minister was of the view that the regulator should focus on deepening the corporate bond market and more IPOs to help meet the disinvestment targets as well as monetisation of assets through InVITs.

"We have apprised the finance minister about what are our priorities and what we have been doing in the (past) one year," he said.

He added that Jaitley appreciated the initiatives taken by the markets regulator.

"I think more than Sebi, capital markets... have been really doing well globally," Tyagi said.

The board also discussed the implementation of the Budget announcements related to Sebi.

It was wrong to say that long-term capital gains (LTCG) tax would have no impact on Indian markets but it would be minimal, said Tyagi, adding that global factors posed a bigger risk. 

According to TV reports, the Sebi chairman added that since markets were booming, it was an opportune time to introduce LTCG tax. He said that he had not received any representation from investors regarding LTCG tax. 

The chairman also said that small investors need not panic over market falls and that they were doing well to invest via mutual funds. However, he cautioned that it can't be as risk-free as deposits. 

Later, while addressing RBI's board, Jaitley said: "I had a meeting with Sebi board and one of the factors that stood out from the regulator's presentation is that there is an increased reliance on corporate bonds as far as credit is concerned."

Besides Jaitley, the Sebi board meeting was attended by Minister of State for Finance Pon Radhakrishnan, Finance Secretary Hasmukh Adhia, Chief Economic Adviser Arvind Subramanian, Corporate Affairs Secretary Injeti Srinivas, Sebi's board members G Mahalingam, Arun P Sathe and Madhabi Puri Buch and other senior officials of the markets regulator.