Ushering in a raft of reformist measures, the Securities and Exchange Board of India (Sebi) on Saturday decided to amend financial criteria for municipalities to issue bonds and permitted mutual funds to invest in REITs and InvITs.
Apart from allowing celebrity endorsement of products in the fast-growing mutual funds market, the Sebi also slashed broker fee by 25% and strengthened settlement as well as merger regulations.
Other than approval of the measures aimed at reducing the overall transaction cost as also protect the interest of public shareholders, the Sebi’s board, which met in Jaipur, gave its nod to market intermediaries and companies to make regulatory payments digitally.
“Keeping this objective in mind and taking into consideration the projected income and expenditure of Sebi for the next three financial years, the board decided to reduce the fees payable by brokers by 25% from Rs 20 per crore of turnover to Rs 15 per crore,” a release said. Municipalities having a surplus in their books in any of the three immediately preceding financial years will be eligible to issue bonds. The eligibility would also be decided by financial criteria specified by Sebi from time to time.
The decision also comes against the backdrop of Prime Minister Narendra Modi pitching for boosting the municipal bonds market last month.
Mutual funds have been allowed to invest in real estate investment trusts (REITs) and infrastructure investment trusts (InvITs) that have been classified as hybrid instruments.
But the regulator has announced some caps. A mutual fund scheme shall not invest more than 5% of its NAV in units of a single issuer of REITs and InvITs.