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Finance Ministry writes to Sebi, ‘requests’ agency to withdraw perpetual bond rule

Finance Ministry writes to Sebi, ‘requests’ agency to withdraw perpetual bond rule

Finance
The finance ministry "requested" the Securities and Exchange Board of India (Sebi) Friday to withdraw the part of its Wednesday circular that changed the rules followed by mutual funds to value perpetual bonds. The capital market regulator hadn't responded to the suggestion at press time, but is expected to review the rules before they take effect on April 1, said people with knowledge of the matter. The move by the ministry was a rare instance of such a government intervention being made public, experts said. The ministry's objection is to the rule that requires debt mutual funds to value perpetual bonds as a 100-year instrument from April 1. Fund managers too had raised concerns over this. "Considering the capital needs of banks going forward and the need to source the same from the capi...