Sebi chief Buch hopes corporate bond market grows as rapdily as equities

Mumbai: Sebi chairperson Madhabi Puri Buch on Thursday said the market regulator hopes technology advancements and transparency will help the corporate bond market grow as rapidly as the equities segment.

Addressing the annual general meeting of mutual fund industry lobby grouping Amfi here, Buch said the primary market activity on corporate bonds is healthy with issuances exceeding Rs 8.50 lakh crore in FY24, but it is the secondary market where there is a dearth of activity.

"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," she said.

Buch, who is under a cloud following allegations of impropriety, also quipped about the potential talk of "conflict" if she speaks about Real Investment Trusts and ICICI Bank.

US-based short seller Hindenberg Research has accused the Sebi chief of having promoted REITs because of her husband's involvement with the promoter of some trusts. Opposition Congress party alleged that she received salary from her ex-employer ICICI Group. Buch has denied all the allegations.

Meanwhile, Buch said that monthly volumes in the recently launched repo facility on corporate bonds have touched Rs 20,000 crore.

Without specifying, Buch said Sebi is waiting for approvals from the Reserve Bank on some proposals and exuded confidence about the corporate repo activity going up after that.

Apart from corporate repo, the newly created platforms for corporate bond which are aimed at democratising investments will also help the secondary market activity in corporate bonds, Buch said.

Fintechs and bond platforms have to help in the cause of growing the activity, she said, adding that the Sebi has also got disclosure requirements on private and public bonds on equal footing.

Meanwhile, on the equity IPOs front, Buch said there is no application which is pending for more than three months.

She also exhorted the MF industry to use provisions of the stewardship code more actively so that the suppressed voice of the retail investors gets heard.

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

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

Speaking at the same event, Sebi's whole time member Ashwani Bhatia said he hopes that there is a rub-off of Amfi's tagline "MF sahi hai" on the investors in the Futures and Options segment given the losses that they're living with.

He also said that regulations are tough because of the need for industry to be responsible in its fiduciary duty of managing else's money.

Meanwhile, Buch said Sebi will soon be coming out with an essay writing competition which will have two categories, including one where entries will be allowed to use generative AI applications like Chat GPT which will encourage innovative prompts to be given.