SEBI’s ‘light touch’ norms by Sep to push 25% financing via corporate bonds

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Securities Exchange Board of India (SEBI) will by September come out with “light touch” regulations to nudge large listed companies to meet one-fourth of their financing needs from corporate bonds, Chairman Ajay Tyagi said today after a board meeting of the capital markets regulator in the national capital.

“The government proposal to mandate listed firms to raise 25 percent of funds via corporate bonds is a good step and SEBI will come out with detailed rules by September in this regard. Obviously, those regulations would be light touch regulations because it is to encourage corporates towards bond market,” Tyagi told mediapersons after the board meet.

He said the definition of large corporates and which rated bonds would be covered in the regulations were issues the regulator would study before releasing its norms.

The meeting was significant as it was SEBI’s first after Finance Minister Arun Jaitley announced his 2018-19 Union Budget. Jaitley, who addressed the SEBI board, had in his February 1 Budget said the regulator would consider mandating, beginning with large corporates, to meet about one-fourth of their financing needs from the bond market.

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