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'Light touch' norms to boost bond mkts will be out by Sep:Sebi

Press Trust of India  |  New Delhi 

To deepen the corporate bonds market, Sebi today said it will come out with "light touch" regulations by September to encourage large corporates to raise 25 per cent funds through this route.

"Sebi will soon come out with norms on corporate bonds to encourage companies to tap this route for raising funds. The government proposal to mandate listed firms to raise 25 per cent funds via corporate bonds is a good step and Sebi will come out with detailed rules by September in this regard," told reporters here after its board meeting.

Further, he said those regulations would be "light touch regulations because it is to encourage corporates towards market".

Moreover, also asked Sebi to take more steps to deepen the market.

He said the the proposed regulation would define "large corporates" and which rated bonds would be covered in the norms.

Terming the segment as a "good story" in the last two years, said in 2016-17, Rs 6.7 lakh crore was invested in corporate bonds, a figure that would likely be surpassed in the ongoing fiscal.

said it is encouraging to see firms tapping the market and the regulator was taking several steps to deepen the activity in that segment.

He also said corporate sector has been borrowing more from the bond market in the last two years, which is a welcome trend. In fact, the quantum raised last year was much more than the extended to corporates.

The announcement comes after Jaitley in his Budget speech for 2018-19 said that Sebi will consider mandating, beginning with large corporates, meeting about one-fourth of the companies' financing needs from the bond market.

The (Sebi) has been taking a slew of measures to deepen the bond market. These include allowing foreign portfolio investors (FPIs) to invest in unlisted corporate debt securities as well as putting in place a new framework for consolidation in debt securities.

In its annual report, Sebi had said: "Developing a liquid and vibrant corporate bond market further is an important agenda for enhancing the role of the Indian securities market in channelising Sebi will work with all stakeholders for this.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Sat, February 10 2018. 18:15 IST