Sebi may ease disclosure rules for debt issuers, bond tokenisation pilot on cards

Capital markets regulator Sebi will examine whether disclosure requirements for debt-only listed entities need to be relaxed as part of broader efforts to deepen India's corporate bond market, Chairman Tuhin Kanta Pandey said on Tuesday, PTI reported.Speaking at an event organised by CareEdge Ratings in Mumbai, Pandey said the regulator would also launch a pilot project on bond tokenisation to assess whether it can improve settlement speed and transparency."There is a need to review whether debt-only listed entities need the same rigour under LODR (listing obligations and disclosure requirements) regulations as equity-listed companies. We will take up this review in due course," Pandey said.He reiterated that Sebi is also exploring a separate regulatory classification for debt brokers aimed at reducing costs, lowering entry barriers and encouraging specialised intermediaries in the debt market.Pandey said stock exchanges are ready to launch the corporate bond repo platform immediately after the Reserve Bank of India issues final guidelines.The proposed tokenisation pilot, based on distributed ledger technology, will test whether it can deliver faster settlements, improved traceability, automated servicing and greater transparency.Pandey said Sebi is also reviewing the municipal debt securities framework to strengthen financing options for urban infrastructure projects, enable pooled financing for multiple civic bodies and encourage greater retail participation.He said while India's corporate debt market had expanded significantly, scale alone was not enough."There is scale in the corporate debt market," Pandey said, adding that diversity, liquidity and wider participation are equally important.Outstanding corporate bonds have grown from around Rs 17.5 lakh crore at the end of FY15 to more than Rs 59 lakh crore, registering annual growth of 12 per cent, he said.In FY26, debt issuances mobilised Rs 9.1 lakh crore, nearly twice the amount raised through equity markets.Pandey also flagged low retail participation in corporate bonds and called for greater awareness efforts."While retail investors have embraced equities and mutual funds, corporate bonds remain unfamiliar to many households," he said.According to Sebi's investor survey, awareness of corporate bonds stands at only 10 per cent, while household penetration remains below 1 per cent."We need simpler access, better disclosures, and stronger fixed-income literacy," he said."The corporate bond market is the economy's second engine of credit. It reduces over-reliance on banks. A deep bond market can finance infrastructure, productive capacity, urbanization, energy transition, housing, logistics and digital infrastructure," Pandey added.