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SEBI explores broadening QIB definition to allow debt market investments by universities and urban local bodies QIB

SEBI explores broadening QIB definition to allow debt market investments by universities and urban local bodies

India Blooms News Service | @indiablooms | 16 May 2023, 10:07 pm

If the consultation paper issued by the market regulator SEBI is approved, it could enable higher educational institutions, urban local bodies, and Micro Units Development & Refinance Agency (MUDRA) to participate as Qualified Institutional Buyers (QIBs) in investing in debt securities, Moneycontrol reported.

These institutions may be required to provide self-certification of their expertise in evaluating investments and may also consider seeking assistance from external experts for evaluation purposes. However, the responsibility for the investment will ultimately lie with the respective institution.

SEBI has released a consultation paper seeking suggestions to broaden the scope of qualified institutional buyers (QIB) in the debt market. The objective is to include additional categories of investors, thereby reducing the cost of fundraising and promoting greater participation in the market.

At present, qualified institutional buyers (QIBs) are defined in the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, which includes various entities such as mutual funds, venture capital funds, foreign portfolio investors, public finance institutions, and more.

The consultation paper aims to expand the definition of QIBs specifically for investing in debt securities. By broadening the types and categories of investors, it is expected to provide access to a wider range of investment opportunities in the primary issuance market and promote fairness within the bond market.

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