Ajay Tyagi, who took over as chairman, Securities and Exchange Board of India (Sebi), on March 1 met capital market participants, lawyers and proxy advisory firms for the first time on Monday. The agenda was to listen to the issues faced by the industry.
The 90-minute meeting, which was organised by the Federation of Indian Chambers of Commerce and Industry (FICCI)’s capital market division, was attended by Edelweiss Group chairman Rashesh Shah, Cyril Amarchand Mangaldas Managing Partner Cyril Shroff, Citi India Global Banking Head Ravi Kapoor and others. From Sebi’s side, besides Tyagi, the meeting was attended by wholetime member S Raman and executive directors. Capital market
participants spoke at length about issues that would make things simpler for securities markets. These included merging the different categories in initial public offerings (IPOs) — retail, qualified institutional buyers and anchor investors — into a single category. Reducing the number of days an IPO is kept open for subscription from three to two was also discussed.
Market participants also sought doing away of a separate know-your-customer (KYC) process for mutual funds. “With banks already doing a detailed KYC and transactions happening through bank accounts, doing a separate KYC for mutual funds does not make much sense,” said a participant who attended the meeting, adding that digitisation is making it easier for all players to share information among themselves.
Other issues such as reducing the registration burden in different states once goods and services tax is applicable was also sought. “At present, brokerage houses and mutual funds have to be registered in all the states they operate in and the process, besides being time consuming, would also slow down the progress and reach of these industries. Things will improve substantially if this process was eased,” said an industry player.
Expanding incentives for investors coming through the GIFT City by allowing tax incentives for not only investing in India but in other countries was another important point that the industry spoke about. Players said that globally, other special economic zones provide this facility. Capital market participants also asked Tyagi to simplify delisting, buyback and takeover regulations.
Sources said that the government has been wanting to see more progress in infrastructure investment trusts or InvITs — a point that was reiterated in Monday’s meeting. InvITs are trusts that manage income-generating infrastructure assets, typically offering investors regular yield and a liquid method of investing in infrastructure projects.
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