Mumbai, Sep 16 (FN Bureau) The Securities and Exchange Board of India (SEBI) Chairman Ajay Tyagi on Thursday said that there was an urgent need for the development of bonds. Addressing the inaugural session of the 12th CII Financial Markets Summit, he 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.” The SEBI Chairman said, “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.” He also elaborated on the initiatives taken by SEBI as well as the reforms that SEBI has in the pipeline to achieve such a bond market.
Mr Tyagi said there was also the need for development of a credible credit default swap market. ”Another important need is for development of a credible credit default swap market to facilitate transfer and management of credit risk in an effective manner,” he said. Focusing on the theme for the 12th CII Financial Markets Summit, the Chairman said, “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.” Mr Tyagi said India still had to go a long way in order to deepen the domestic individual investor’s participation in the capital market. The SEBI Chairman also acknowledged the need for having a robust margining system. “Having a robust margining system is a must for ensuring a fair, transparent and reliable trading,” he said. Speaking on the topic of sustainability reporting and ESG investments, the chief of the regulatory authority said encouraging sustainable investments was no longer a fad and had become the need of the hour. Addressing the session, T V Narendran, President, CII and CEO and MD, Tata Steel Ltd, said, “There was a seminal change in the way 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.” He said, “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.” The CII President iterated that the requirement for the Chairman and MD or CEO not to be related should not be mandatory especially considering that requisite checks and balances are already present in current laws to counter any potential ill-effects of such a situation. “Such a requirement, which at times can even be counter-productive, is not mandatory in even advanced economies such as the 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.