Zerodha co-founder Nithin Kamath appreciates Sebi's stance on retail involvement in bond markets

The Securities & Exchange Board of India (SEBI) reduced the face value of corporate bonds from Rs 1 lakh to ₹10,000 on Tuesday, April 30. This move is expected to increase retail investor engagement in debt markets. Zerodha's co-founder Nithin Kamath appreciates Sebi's action on retail involvement in bond markets.

Writing on X, Kamath said, "Companies can now issue bonds with a face value of Rs 10,000. This is a great move that can help attract retail participation in the bonds. With all the changes in the last few years, SEBI has done an amazing job of making bonds accessible to small investors."

Meanwhile, today (May 1), Sebi announced that it has made the nomination optional for jointly-held mutual fund accounts in a bid to promote ease of doing business.

Additionally, Sebi allowed fund houses to have a single fund manager to oversee commodity and foreign investments. This would reduce the cost of managing the fund. 

The regulator has set June 30, 2024, as the deadline for all existing individual mutual fund holders to nominate or opt out of nomination. If they fail to comply, their accounts will be frozen for withdrawals. Read more here

"Accordingly, it has been decided that the requirement of nomination ....For mutual funds shall be optional for jointly held mutual fund folios," the Securities and Exchange Board of India (Sebi) said in a circular.

Sebi to curb fraudulent trades in mutual funds

The market watchdog has also cleared certain changes to certain rules governing mutual funds, including an institutional mechanism aimed at countering fraudulent trades such as insider trading and front-running. 

Read more- Sebi Board Meeting: Regulator announces steps to curb fraudulent trades in mutual funds

Sebi cuts corporate bonds' face value 

To enhance the participation of retail investors in the corporate bond market, market watchdog Sebi on Tuesday decided to drastically cut the face value of such debt securities to Rs 10,000 from Rs 1 lakh at present.

The Sebi board in its meeting has also decided to come out with a framework for unit-based employee benefits (UBEB) in the context of REITs (real estate investment trusts) and InvITs (infrastructure investment trusts), the market watchdog said in a statement.

Aside from lowering the denomination, Sebi has standardised the record date for identifying eligible holders, harmonised the format of the debenture trustee's due diligence certificate, and allowed entities that have only listed non-convertible securities to publish financial results in newspapers with greater flexibility.

Sebi said its board accepted a proposal to allow issuers to issue NCDs or NCRPS via private placement at a lower face value of Rs 10,000, with the obligation to employ a merchant banker.

Also Read: Sebi bans two entities from markets for 1 year for illegal stock tips via Telegram channel

Meanwhile, Kamath recently made his first public appearance, a little over two months after revealing that he had suffered a small stroke. The entrepreneur talked at the Zero1 Festival on well-being and wealth.

With agency inputs