New Delhi, Jan. 30: An expert committee has suggested a series of regulatory, tax and other related measures, including putting in place a system of uniform stamp duties on government debt instruments, to strengthen the corporate bonds and securitisation market.

The panel, headed by UTI Asset Management Company chairman R.H. Patil, had submitted its report to the government last month. It said in the report that stamp duty on partly secured and unsecured debentures should be made uniform across all states in the country and be linked to the tenor of the securities with an overall cap.

The committee suggested that the debt funds registered with the Securities and Exchange Board of India (Sebi) should receive the same tax treatment as venture capital funds and, specifically, ‘pass-through benefits’ under Section 115U and 10(23FB) of the Income Tax Act should also apply to registered debt funds.

It also advocated that suitable changes in the existing regulations should be made by the market regulator to provide direct access to institutions like banks, insurance companies and mutual funds to the trade reporting system.

For promoting healthy growth of the securitisation market, the Centre should consider establishing an appropriate institutional process so that states can arrive at a consensus on the affordable rates and levels of stamp duty on debt and security instruments. The Patil commitee wanted the rules for tax deduction at source for corporate bonds to be brought in line with the ones applicable to government securities.

In order to incentivise firms to tap bonds market for raising part of their capital, the time and cost for public issues and the disclosure and listing requirements for private placements should be made simpler. Banks, too, should be allowed to issue bonds with five years maturity for all purposes, it said.

To resolve uncertainty in taxation issues regarding securitised papers, the committee said the Centre should modify regulations to permit wholesale investors to invest in units of closed-ended mutual fund schemes. It suggested that the minimum market value criteria of Rs 10 lakh for trading in corporate bonds at stock exchanges should be reduced to Rs 1 lakh to enable better access to small investors.