Why has SEBI kept retail investors out of AT1 bonds in the future?

After the mis-selling fiasco pertaining to the Yes Bank AT1 bonds, SEBI has tightened rules for fresh issue of AT1 or additional tier-1 bonds. To begin with, SEBI will restrain retail investors from investing in AT1 bonds. This protects retail investors from risky instruments.

AT1 bonds came under a shadow after Yes Bank wrote off Rs.8415 worth of AT1 bonds to zero. Also banks have to mandatorily AT1 bonds on the electronic EBP platform only. Only QIBs will be allowed to invest in AT1 bonds and minimum allotment will be Rs.1 crore.