Urgent need for strengthening of bond market for infrastructure development, says SEBI chairman

New Delhi [India], September 16 : Securities and Exchange Board of India (SEBI) Chairman Ajay Tyagi on Thursday emphasised the urgent need for the bond market development.
Addressing the inaugural session of the 12th Confederation of Indian Industry (CII) Financial Markets Summit today, the SEBI Chairman said, "The need for bond market development has been often stated by various people from various forums. There is an increased urgency for this now considering the infrastructure development ambitions in the country. Trading in the secondary market lacks depth and is largely dominated by mutual funds. We need more public issuances, issuances of relatively low rated bonds and increased depth in the secondary market with many more players."
Tyagi also elaborated on the initiatives taken by SEBI as well as the reforms in the pipeline to achieve such a bond market.
He added that there was also the need for the development of credible credit default swap market.
"Another important need is for the development of credible credit default swap market to facilitate transfer and management of credit risk in an effective manner," Tyagi said.
Focusing on the theme for the 12th CII Financial Markets Summit, the Chairman mentioned that "building India for a new world needs further encouragement and growth of capital markets to meet the funding requirements of growing economy in a transparent manner."
Tyagi also said that India still had to go a long way in order to deepen the domestic individual investor's participation in the capital market.
SEBI Chairman also emphasised the need for having a robust margining system.
"Having a robust margining system is a must for ensuring fair, transparent and reliable trading," he said.
On sustainability reporting and ESG investments, the chief of the regulatory authority said that encouraging sustainable investments was no longer a fad and had become the need of the hour.
Speaking at the occasion, TV Narendran, President, CII and CEO and MD, Tata Steel said, "There was a seminal change in the way the financial sector has evolved during the pandemic and this change agent has been technology. Also, we see a shift from Bank-led to market-led model of economic progression."
"There is a need to have investor-friendly KYC norms that is very critical for the entry of new investors into the market. There was a need for standardization of minimum KYC requirements by all the financial sector regulators and mandatory uploading of existing and updated records in c-KYC records registry by all regulated entities," he stated.
"Such a requirement, which at times can even be counter-productive, is not mandatory in even advanced economies such as UK, US, France etc. It is important that Indian entrepreneurs are not placed at a disadvantage by imposing such requirements. Feedback from our membership reflects their desire that the decision should be best left to the discretion of the Board and to the will of the Shareholders," he said.
Chandrajit Banerjee, Director General, CII highlighted that it was necessary to get the country back on its growth trajectory and to re-shape businesses through adequate financing options.
Banerjee added, "An important point that I would like to mention is that the Indian Government and Regulators have laid immense Trust in the Indian Busines and Industry through-out the tough period of COVID, whether it is through stable interest and tax rate regime, the position taken on retrospective tax, an enabling ECLGS Scheme with backstop to help the affected sectors to remain above water."