A recent circular by SEBI which is released on Oct-1 has restricted debt Mutual funds to invest in the unlisted commercial paper issued by companies. The information was published recently in the live mint.
Commercial papers(CPs) are the debt instruments through which companies raise funds for the short term typically less than a year. Generally, companies raise money via CPs as they carry fewer coupon rates and result into more spread. Now with this guideline in place, the companies which are issuing CPs have to list them compulsory on NSE or BSE. This means additional financial disclosure for the companies. However, the existing CPs are grandfathered until their maturity.
This has been done due to a recent crisis that happened in the debt market after ILF&S fiasco and the fall of DHFL due to the overexposure of these companies to these commercial papers.