SEBI urges peers to rethink bond market curbs

Markets watchdog calls on RBI, IRDAI, PFRDA to relax investment restrictions to help ease financing for infrastructure

Calling for freer flow of funds from provident and pension funds, insurance firms and banks into corporate and infrastructure debt, India’s capital markets regulator SEBI has urged the RBI, IRDAI and PFRDA to relax investment restrictions so as to make the bond market a more functional source of finance for industry and infrastructure projects. With banks struggling to provide long-term capital, two members of the Securities Exchange Board of India have over the past week, sought an urgent rethink on the investment norms specified by SEBI’s financial sector regulator peers for participation in the corporate bond market. This would facilitate a quicker economic recovery, they stressed. Observing that while there were multiple players in the debt market, the number of participants in each investor class remained limited due to the current norms thereby constraining the pool of liquidity available, SEBI whole time member Ananta Barua said at a FICCI capital markets conference.