SEBI Constitutes Municipal Bonds Development Committee

Markets regulator Securities and Exchange Board of India on Friday said it has constituted a committee that will suggest on policy matters pertaining to the development of municipal debt securities and facilitate municipalities for issuance of such bonds.

The regulator has constituted a municipal bonds development committee headed by its Executive Director Sujit Prasad and comprises representatives from municipal corporations, lawyers, professionals, and market practitioners. The panel will advise SEBI on issues related to regulation and development of the primary and secondary market of municipal debt securities, SEBI said in a statement.

It will suggest the regulator on matters required to be taken up for changes in the legal framework to introduce simplification and transparency in systems and procedures in the primary and secondary markets.

Also, the panel would recommend on matters relating to the regulation of intermediaries for ensuring investor protection in the primary and secondary market as well as on measures to facilitate issuers, municipalities, for issuance of municipal debt securities.

In September, SEBI had relaxed norms for 'muni bonds' issuance to help smart cities as well as entities working in areas of city planning and urban development work, including municipalities, to raise funds through debt securities.

Nearly five years ago, the regulator had come out with the Issue and Listing of Debt Securities by Municipalities Regulations and since then seven municipalities have raised nearly Rs 1,400 crore by issuing their debt securities, which are commonly known as 'muni bonds'.