Sebi chief Buch hopes that corp bond MKT will grow as fast as equities

MUMBAI: SEBI Chairperson Madhabi Puri Buch said on Thursday that the market regulator hopes that technological advancements and transparency will help the corporate bond market grow as fast as the equity segment. Addressing the annual general meeting of mutual fund industry lobby grouping Amfi here, Buch said that in FY24, Rs. Primary market activity on corporate bonds is healthy with issuance of over Rs 8.50 lakh crore, but it is the secondary market where activity is lacking.

“I think with the transparency that has come and the way technology is now enabled, we certainly hope that the bond market will quickly see the kind of growth that we’ve seen in the equity markets,” she said.

Butch, who has been under a cloud following allegations of impropriety, also quipped about possible discussion of “conflicts” if she spoke about Real Investment Trusts and ICICI Bank.

US-based short seller Hindenburg Research has accused the Sebi chief of promoting REITs due to her husband’s involvement with promoters of some trusts. The opposition Congress party alleged that she received salary from her former employer ICICI Group. Buch has denied all the allegations.

Meanwhile, Buch said the recently launched repo facility on corporate bonds saw a monthly volume of Rs. 20,000 crore has been touched.

Without elaborating, Buch said Sebi is awaiting the RBI’s approval on some proposals and expressed confidence that corporate repo activity would pick up after that.

Besides corporate repos, a newly created platform for corporate bonds that aims to democratize investments will also help secondary market activity in corporate bonds, Buch said.

Fintech and bond platforms will have to help boost activity, she said, adding that Sebi has also got disclosure requirements on private and public bonds on a par.

Meanwhile, on the equity IPO front, Buch said there is no application that has been pending for more than three months.

She also urged the MF industry to more proactively use the provisions of the Stewardship Code so that the suppressed voice of retail investors is heard.

Sebi likes MFs because of the industry’s potential to serve the cause of financial inclusion, Buch said.

The regulator is on the verge of introducing MF light regulations and is open to suggestions on the same, she said.

Speaking at the same event, Sebi Whole Time Member Ashwani Bhatia said that he hopes investors in the futures and options segment will have an impact on Amphi’s tagline “MF Sahi Hai” that they are living by.

He also said the rules are tough because of the need for the industry to be accountable in its fiduciary duty to manage other people’s money.

Meanwhile, Buch said SEBI will soon come out with an essay writing competition that will have two categories, one in which entrants will be allowed to use a generative AI application like Chat GPT that will encourage giving innovative prompts.