SC: Revisional Jurisdiction Cannot Correct Factual Errors Despite Alleged Concealment  ||  Supreme Court: Wrong Statement in Pleadings is Not Always a False Statement, Perjury Case Quashed  ||  SC: Under JJ Act, Murder Falls Within Heinous Offences; S. 302 IPC Prescribes Minimum Life Sentence  ||  Supreme Court: Cognisance of FERA Complaint is Invalid Without Prior Notice to the Accused  ||  Supreme Court: Terror Cases Cannot Curtail Constitutional Safeguards and the Right to Fair Trial  ||  Supreme Court: Terror Cases Cannot Curtail Constitutional Safeguards and the Right to Fair Trial  ||  SC Upheld Husband's Conviction For Murdering His Wife over an Extramarital Affair  ||  J&K&L High Court: Mere Admission of Issuing Cheque is Not a Plea of Guilt under S.138 NI Act  ||  Calcutta HC: Aadhaar Card Prima Facie Establishes Occupation; Demolition Without Notice is Unlawful  ||  Gauhati High Court: Wildlife Law Doesn't Bar Trade in Unprotected Ornamental Fish Species    

Valuation of Additional Tier 1 Bonds- (Securities and Exchange Board of India) (05 Aug 2024)

MANU/SMFD/0007/2024

Capital Market

1. This has reference to clause 9.3.1.1 and clause 9.4.2 of the Master Circular No. SEBI/HO/IMD/IMD-PoD-1/P/CIR/2024/90 dated June 27, 2024 for Mutual Funds ("Master Circular"), on valuation of bonds with multiple call options.

2. National Financial Reporting Authority (NFRA), in its report to Department of Economic Affairs, Ministry of Finance, has recommended that since the market practice for AT-1 bonds has been observed to trade at or quote prices closer to Yield to Call (YTC) basis, valuation of AT-1 Bonds on Yield to Call basis (adjusted with appropriate risk spreads) will be consistent with the principles of market-based measurement under Ind AS 113.

3. NFRA, in its report, has further stated that the above recommendation on YTC methodology is confined only to the interpretation of Ind AS 113 with reference to the valuation of AT-1 bonds and the issue of deemed maturity date for other purposes is outside NFRA's remit.

4. In view of the above, in order to align the valuation methodology with the recommendation of NFRA, it has been decided that the valuation of AT-1 Bonds by Mutual Funds shall be based on Yield to Call.

5. For all other purposes, since liquidity risk of perpetual bonds is required to be suitably captured, deemed maturity of all perpetual bonds shall continue to be in line with the clause 9.4.2 of the Master Circular.

6. This circular is issued in exercise of powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992, read with the provisions of Regulation 25(19), 47 read with Regulation 77 of SEBI (Mutual Funds) Regulations, 1996, to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.

Tags : VALUATION   ADDITIONAL TIER 1   BONDS  

Share :        
2. National Financial Reporting Authority (NFRA), in its rep... For read more news from newsroom.manupatra.com"data-action="share/whatsapp/share" class="ic_wtsp-grid">

Disclaimer | Copyright 2026 - All Rights Reserved