Mumbai: On Thursday, Sebi Chairperson Madhabi Puri Buch expressed optimism that advancements in technology and increased transparency would enable the corporate bond market to grow as rapidly as the equities segment. Speaking at the annual general meeting of the mutual fund industry lobby group Amfi, Buch noted that primary market activity in corporate bonds is robust, with issuances surpassing Rs 8.50 lakh crore in FY24. However, she pointed out that secondary market activity continues to lag.
“I think the transparency that has come in and the way in which there is now technology enablement, we certainly hope that the bond market will rapidly see the kind of growth that we have seen in the equity markets,” Buch remarked.
Buch also addressed the allegations of impropriety against her, referencing potential discussions about “conflict” when it comes to Real Investment Trusts (REITs) and ICICI Bank. US-based short seller Hindenburg Research has accused her of promoting REITs due to her husband’s association with some promoters. Additionally, the Opposition Congress party has claimed that she received a salary from her former employer, ICICI Group. Buch has categorically denied all allegations.
Separately, Buch reported that monthly volumes in the newly launched repo facility for corporate bonds have reached Rs 20,000 crore. She indicated that Sebi is awaiting approvals from the Reserve Bank on certain proposals and expressed confidence that corporate repo activity will increase subsequently. She further added that the recently established platforms for corporate bonds intended to democratize investments will significantly boost secondary market activity. Buch emphasized the role of fintechs and bond platforms in fostering this growth, noting that Sebi has ensured equal disclosure requirements for both private and public bonds.
Regarding equity IPOs, Buch stated that no application has remained pending for over three months. She urged the mutual fund (MF) industry to actively utilize the provisions of the stewardship code to amplify the voices of retail investors. Buch commended the mutual fund industry for its role in advancing financial inclusion and announced that the regulator is about to introduce MF Lite regulations, welcoming suggestions on the matter.
At the same event, Sebi’s whole-time member Ashwani Bhatia expressed hopes that Amfi’s slogan “MF sahi hai” would positively influence investors in the Futures and Options segment, given the losses they endure. Bhatia highlighted the necessity of stringent regulations to ensure the industry’s responsible management of others’ money.
Lastly, Buch mentioned Sebi’s plans to launch an essay writing competition with two categories, including one that allows entries to use generative AI applications like Chat GPT, aimed at encouraging innovative prompts.
