SEBI to Relax Debt Issuer Disclosure Norms, Launch Bond Tokenisation Pilot

• Sebi reviewing if debt-only entities need same LODR as equity; exploring distinct debt broker classification to lower costs

• Bond tokenisation pilot on DLT tests faster settlement, traceability; corporate bond repo platform ready post-RBI guidelines

• Corporate bonds grew from ₹17.5L cr (FY15) to ₹59L cr (+12%/yr); FY26 debt ₹9.1L cr (2x equity); retail awareness 10%, penetration <1%

Capital markets regulator SEBI will review whether there is a need to relax disclosure norms for debt-only issuers in its efforts to deepen the corporate bond market, Chairman Tuhin Kanta Pandey said on Tuesday.

Speaking at an event organised by CareEdge Ratings here, Pandey also said that Sebi will launch a pilot on bond tokenisation to check if it helps in faster settlement of trades and more transparency.

"There is a need to review whether debt-only listed entities need the same rigour under LODR (listing obligations and disclosure requirements) regulations as equity-listed companies. We will take up this review in due course," Pandey said.

He reiterated that Sebi is exploring a distinct regulatory classification for debt brokers which can lower costs, reduce entry barriers, and encourage dedicated debt market intermediaries.

Pandey said the exchanges are ready to launch the corporate bond repo platform discussed earlier immediately after RBI issues final guidelines.

The pilot on tokenisation will be on distributed ledger technology and test whether tokenisation can deliver faster settlement, better traceability, automated servicing, and greater transparency, Pandey said, affirming that Sebi remains open to innovation but will move carefully.

Sebi is also mounting efforts to deepen the municipal bond market, Pandey said adding that the Municipal Debt securities framework is being reviewed to help civic bodies finance urban infrastructure, allow pooled finance for multiple municipal bodies, and to increase retail participation in municipal bonds.

There is scale in the corporate debt market, Pandey said, stressing that the size alone is not enough and there needs to be diversity, liquidity, and wider participation.

Outstanding corporate bonds have grown from about ₹17.5 lakh crore at the end of FY15 to over ₹59 lakh crore, growing at 12% annually.

In FY26, debt issuances mobilized ₹9.1 lakh crore - nearly twice the amount mobilized through equity, he added.

Pandey rued that the retail participation in the bond market remains low, and underlined the need to devote more focus on awareness.

"While retail investors have embraced equities and mutual funds, corporate bonds remain unfamiliar to many households," he said, pointing to a survey done by the regulator.

The Investor Survey shows corporate bond awareness at only 10%, with household penetration at less than 1%, he said, adding that "we need simpler access, better disclosures, and stronger fixed-income literacy." "The corporate bond market is the economy's second engine of credit. It reduces over-reliance on banks. A deep bond market can finance infrastructure, productive capacity, urbanization, energy transition, housing, logistics and digital infrastructure," he said.