SEBI had organised an outreach programme on Municipal Bonds and Municipal Finance on 20th and 21st January, 2023 at New Delhi. This programme formed a part of SEBI’s initiative to develop Bond markets.
The programme sought to provide a common platform for stakeholders to discuss the concerns of the issuers of Municipal Debt Securities, the requirements of investors, the extant regulatory framework and to recommend measures to increase awareness of and improve traction in the market for Municipal Debt Securities. The press release on this event was issued on 22nd January, 2023.
The two-day event saw participants representing all stakeholders including the Ministry of Housing and Urban Affairs, Municipal Corporations, Stock Exchanges, Credit Rating Agencies, Merchant Bankers, Debenture Trustees, Lawyers, NGOs and Institutional investors.
Participants at the workshop had detailed discussions among various stakeholders on their concerns, suggestions and recommendations. The two-day event also brought focus to the use of existing revenue-generating assets managed by Municipal Corporations and the financing of green projects undertaken by Municipal Corporations.
The event also witnessed the launching of an Information Database including a repository of information pertaining to Municipal Bonds on the SEBI website. The database is intended not merely to serve as a guide but also to create awareness about municipal debt securities. The Information database can also be accessed by way of a Quick Response Code (QR Code) that is provided in the press release.
The information database contains a wide range of information such as:
- Statistics and regulations, circulars, guidance note and Frequently Asked Questions issued by SEBI in respect of Municipal Debt Securities.
- Checklists for pre-listing requirements and sample letters and certificates from various intermediaries to be obtained by an Issuer who plans to tap the Municipal Bond Market.
- Templates for agreements between various stakeholders and
- Indicative Due Diligence Questionnaire for Merchant Bankers.
It may be recalled that in 2015, SEBI had introduced a regulatory framework for the issue, listing and trading of Municipal Debt Securities. This framework was reviewed by SEBI in 2019. Interestingly, since 2017, twelve issues of Municipal Bonds have been made by ten Municipal Corporations in the country, raising almost Rs. 2000 Cr. The funds raised have been used for various developmental projects like liquid waste management projects, water supply projects, tertiary sewage treatment plants, residential projects etc