Sebi to relax norms to allow smart cities issue funds

New Delhi: Capital market regulator Sebi is planning to ease its norms for 'Muni Bonds' to help smart cities and other registered entities working in areas of city planning and urban development work, like municipalities, raise funds through issuance and listing of their debt securities.

The Securities and Exchange Board of India (Sebi) had issued its Issue and Listing of Debt Securities by Municipalities (ILDM) Regulations nearly five years ago and since then seven municipalities have raised nearly Rs 1,400 crore by issuing their debt securities, which are commonly known as 'Muni Bonds'.

Officials said that the regulator is now proposing to allow this route for a larger number of entities including special purpose vehicles set up under the central government's ambitious 'Smart Cities Mission'.

The proposed norms would be presented for Sebi's board approval at a meeting scheduled later this month, the officials added.

After representations from the industry and market participants for amending its ILDM Regulations to expand this market segment, Sebi had initiated a public consultation process in June proposing certain amendments to these norms.

Under the current regulations, this fund-raising route is only available to the issuers defined as a municipality under the relevant articles of the Constitution of India or the corporate municipal entities set up as a subsidiary of a municipality for the purpose of raising funds for a specific municipality or a group of those.