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.
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