homevideos Newsmarket NewsPerpetual bond circular: Expect some moderation in the norms issued by SEBI, says Birla Sun Life’s Balasubramanian
Perpetual bond circular: Expect some moderation in the norms issued by SEBI, says Birla Sun Life’s Balasubramanian
The finance ministry today requested Sebi to withdraw the 100-year maturity norm. According to the finance ministry, valuing AT-1 bonds at 100-year maturity will cause high MTM losses. Speaking to CNBC-TV18, A Balasubramanian, MD & CEO of Aditya Birla Sun Life AMC and also board member of Association of Mutual Funds in India (AMFI), said that they have made a representation and are in talks with SEBI to see if tweaking is required.
Market regulator Securities and Exchange Board of India (SEBI), on Wednesday, had issued a circular, which capped the exposure mutual funds can have to perpetual bonds or additional tier-I (AT-1) bonds. SEBI also said that these bonds should be valued with a maturity of 100-year.
However, the finance ministry today requested Sebi to withdraw the 100-year maturity norm. According to the finance ministry, valuing AT-1 bonds at 100-year maturity will cause high MTM losses.
Speaking to CNBC-TV18, A Balasubramanian, MD & CEO of Aditya Birla Sun Life AMC and also board member of Association of Mutual Funds in India (AMFI), said that they have made a representation and are in talks with SEBI to see if tweaking is required.
“We are making a recommendation and we will have discussion with SEBI. I am sure SEBI also would understand the industry representations and probably we should expect some moderation to whatever they have given,” he said in an interview to CNBC-TV18.
However, he said that SEBI takes action with best interest of market and investors and is the final authority.
“The regulator takes into account various needs of the market and takes a decision in the best interest of the market as well as investors. So any recommendation coming from outside the regulator can be considered as recommendation, reservation of the market. However, ultimately SEBI is the final authority, I would assume they would go by what they feel is right in the broader interest of the market as well as investors,” he said.
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(Edited by : Bivekananda Biswas)
First Published: Mar 12, 2021 4:01 PM IST
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