SEBI Chairman U K Sinha has urged municipal corporations to improve their systems of accounting to double entry besides improving the quality of information they disclose to improve their credit rating.

Speaking at the sidelines of a conference on municipal bonds in Mumbai on Thursday, Sinha said improvement in their credit would make it easy for these bodies to issue municipal bonds at attractive interest rates.

“It is high time we move away from the obsolete accounting system, which municipalities follow, and need to adopt latest modern investor friendly accounting norms,” Sinha said adding that SEBI was open to do whatever it took to ensure the development of the municipal bond market.

SEBI in July 2015 had unveiled its norms on the municipal bond market which outlined the manner in which these bonds could be issued, the requisite disclosures besides protection of investor interest.

He further suggested linking the interest rate offered on a municipal bond to yields on G-Sec plus a premium as bonds offering a yield of over 8 per cent per annum cannot be tax free.

He said that the bond markets could be developed in cooperation with other sectoral regulators such as IRDA, PFRDA and EPFO who in turn could ensure participation of insurers and pension funds into the municipal bond market.

This would enable the development of this market as these entities being long term investors in nature would add to the depth.

On the issue of REITs and InViTs, Sinha said that the SEBI board would make necessary changes in norms of these instruments in its board meeting this month and there was no reason why these would not take off, post that.

He added that SEBI had received applications from several entities for establishing a REITs and InVITs.

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