Sebi approves new norms for municipal bonds

Sebi, the capital market regulator, has approved new norms for issuance and listing of municipal bonds or Muni bonds, on stock exchanges.

The decision will help raise funds for infrastructure projects and the government's smart cities initiative.

"These bonds can be issued by municipal authorities to the public and institutional investors, including sovereign wealth funds and pension funds from abroad, and help raise funds for urban development", Sebi Chairman UK Sinha said in New Delhi.

Final norms for issuance and listing of these securities, which are very popular in the US and other Western markets, would be notified in six to eight weeks.

The norms would come with safeguards and provide for disclosure requirements to be made by prospective issuers. Safeguards to protect interests of investors and putting their money in municipal bonds include the need for having investment grade credit rating.