SEBI calls for tax breaks on municipal bonds

New Delhi: Capital markets regulator SEBI is expected to take measures regarding the Futures and Options (F&O) segment very soon, in a bid to enhance investor protection, its senior official said on Tuesday.

In addition, SEBI has urged the government to introduce tax breaks for subscribers of municipal bonds, which are crucial for funding infrastructure development. The regulator will make a case for a tax break for municipal bonds during a meeting with the finance commission, the regulator's whole time member Ashwani Bhatia said here. Since 1997, municipalities have raised Rs 2,700 crore through bonds for infrastructure projects. Talking about F&O, Bhatia said,” SEBI is very soon going to do something about F&O. Study has come (recently)”. The regulator, in its consultation paper recently, proposed seven measures to tighten the rules for index derivatives– revise the minimum contract size and require upfront collection of option premiums intra-day monitoring of position limits, rationalisation of strike prices, removal of calendar spread benefit on expiry day and increase in near contract expiry margin.