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Informist, Friday, Jan. 10, 2025

 

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--Buch: SEBI should be facilitator, not come in the way of capital formation
--CONTEXT: SEBI Chairperson Buch's comments at a securities market event
--SEBI Buch: Will roll out INR 250 SIP shortly
--SEBI Buch: Working on AI to cut public issue applications' turnaround time
--Buch: Contrary to opinion, SEBI circulars not about raising compliance cost
 

 

By Anand JC

 

MUMBAI – The Securities and Exchange Board of India has been able to reduce the turnaround time of pending applications for public issues to less than three months, Chairperson Madhabi Puri Buch said at an event in Mumbai on Friday. Buch said the market regulator hopes to further cut the clearing period for most pending applications to less than a month by the end of this year.

 

SEBI is working on projects to enable artificial intelligence to reduce the ageing and pendency of public issues, Buch said. "When markets are good and companies need to raise capital, they cannot afford to wait," Buch said.

 

In the case of mutual fund schemes, the clearing period for most applications has been cut down to within a month. Back in September 2022, SEBI was taking over three months to clear a significant number of mutual fund applications, as per a chart presented by Buch.

 

The market regulator said that it seeks to be a facilitator of capital formation in the country, rather than coming in the way of it. The SEBI chief countered the perception that when the regulator rolls out circulars, it adds to their cost of compliance. Circulars detailing measures taken by the SEBI targeted at investor protection and risk reduction formed 21% of the overall circulars by the regulator in Apr-Dec last year. Those aimed at ease of doing business and ease of compliance formed 63% of the overall circulars in the period, Buch said.

 

"Contrary to popular perception that all regulation is bad and every circular is only more compliance requirements by the ecosystem is actually false," Buch said. A systematic investment plan enabling investment of INR 250 will be launched shortly to boost financial inclusion, Buch said.

 

The overall capital formation in India in Apr-Dec was INR 10.7 trillion. This is inclusive of money raised through debt, equity, real estate investment trusts and infrastructure investment trusts. In 2024-25 (Apr-Mar), capital formation is expected to grow to INR 14.3 trillion, higher than INR 11.8 trillion in FY24.

 

So far in FY25, INR 7.3 trillion has been raised through the primary debt market, and INR 3.3 trillion raised through the equity market. SEBI expects money raised through REITs and InvITs to exceed the capital raised from debt and equity markets in the next 10 years.  End

 

Edited by Ashish Shirke

 

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