Sebi mulls expanding definition of QIB for debt securities investments

New Delhi: Capital markets regulator Sebi on Tuesday proposed expanding the definition of qualified institutional buyer (QIB) for investing in debt securities in a bid to increase the supply of funds to the issuers of such securities.

It suggested that certain categories of investors should be included in the QIB segment such as Sebi-regulated entities as well as multistate cooperatives with net worth of over Rs 500 crore. Among others, pension funds, banking financial companies and housing finance companies, small finance banks, reinsurance companies, refinancing agencies such as MUDRA and universities should be included in the QIB category. The proposed move would increase the potential investor base for issuers of debt securities and help in further developing the debt markets, Sebi said.

The Securities and Exchange Board of India (Sebi) has sought public comments on the proposals till May 29. In its consultation paper, the regulator noted that many investors, with large corpus, financial sophistication and ability to evaluate investment opportunities have emerged. There are also existing entities which could be considered being recognised as QIBs for the same reason. Such investors can serve to provide required funds to issuers through subscription to debt securities or non-convertible securities, and enhancing the depth in the bond market, Sebi said.