Commercial Paper issuers may soon have to disclose key information to mutual funds: report

Corporates, non-banking finance companies (NBFCs) and other businesses may soon have to declare key information for issuing commercial papers (CPs) to mutual funds, The Economic Times reported.

The recent discussions between Securities and Exchange Board of India (Sebi) and fund houses about the proposed move will compel the firms that issue CPs to explain their ‘asset-liability (AL) mismatch’ that hit the financial market in the recent past, the report said citing a senior official in the MF industry.

The evaluation of the mismatch between the assets and the liabilities, along with market intelligence and due diligence carried out by a mutual fund house, is likely to enable a fund manager to have a better idea on the liquidity stress, the report said.