India's ATI rules cause a stir

摘要

India's finance ministry has told the market regulator to rethink a proposed rule change around bank capital securities over concerns they will cause panic in the debt market. In a highly unusual move, the ministry last week asked the Securities and Exchange Board of India to withdraw one of the proposals, introduced only one day earlier, which would treat the maturity of all perpetual bonds as 100 years from the date of issue for valuation purposes. Fund managers said this would roil the market as most funds value Additional Tier 1 hybrids based on a five-year call option.