SEBI Launches Information Database on Municipal Bonds
SEBI Launches Information Database on Municipal Bonds: As part of SEBI’s initiative to develop Bond markets, an outreach programme on Municipal Bonds and Municipal Finance was organized on January 20 and 21, 2023 at New Delhi to provide a common platform for stakeholders to discuss the concerns of the issuers of Municipal Debt Securities, the requirements of investors, the extant regulatory framework and to recommend measures to increase awareness of and improve traction in the market for Municipal Debt Securities. Representatives from various stakeholders, including the Ministry of Housing and Urban Affairs, municipal corporations, stock exchanges, credit rating agencies, merchant bankers and debenture trustees, participated in the programme.
January 2023 Current Affairs Quiz
About The Information Database:
The information database contains a wide range of information in the form of statistics, rules, circulars, advice notes, and frequently asked questions (FAQs) about municipal debt securities that were published by Sebi.
The repository contains various checklists for pre-listing requirements and sample letters and certificates from various intermediaries to be obtained by an issuer who plans to tap the municipal bond market.
About Municipal Bonds :
A municipal bond (muni) is a debt security issued by a state, municipality or county to finance its capital expenditures, including the construction of highways, bridges or schools. Through muni bonds, a municipal corporation raises money from individuals or institutions and promises to pay a specified amount of interest and returns the principal amount on a specific maturity date. These are mostly exempt from federal taxes and from most state and local taxes, making them especially attractive to people in high income tax brackets.
Significance of Municipal Bonds Market:
Municipal Bonds can help the Urban Local Bodies (ULBs) to garner revenue to complete budgetary projects as property tax is the only major source of municipal revenue. Growth of the municipal bond market is critical for India’s large cities and towns to upgrade their creaking infrastructure. The ability of municipal bodies to be self-sustaining is also critical to the success of the Centre’s pet projects such as Smart Cities and Amrut.