Sebi’s Buch highlights speed, inclusivity as key drivers for India’s market growth

Madhabi Puri Buch, the chief of the Securities and Exchange Board of India (Sebi), underscored the critical importance of speed in capitalizing on India’s markets. 

“An overnight delivery is considered delay today in a physical world so imagine the expectations from a digital world!” she remarked, emphasizing the regulator's commitment to keeping pace with market demands.

Buch was delivering the keynote address at a summit organized by the Confederation of Indian Industry on Monday, focusing on how regulators can contribute to a Viksit Bharat (developed India). She highlighted that Sebi was responding to the market’s need for speed with policies that clearly define investor protections. 

"We have restructured ourselves to focus on specific activities with clear set of policies” Buch said.

Her comments come against the backdrop of Sebi’s recent launch of the world’s fastest trade settlement system. Earlier this year, India transitioned all stock market trades from a T+2 to a T+1 settlement cycle, ensuring that trades are settled just a day after execution. Additionally, Sebi has directed clearing corporations and depositories to make funds available to foreign portfolio investors (FPIs) on the same day as settlement, starting in October.

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Addressing the broader theme of preparing markets for Viksit Bharat, the Sebi chief stressed the importance of capital formation and wealth creation for the Indian economy. She underscored the need for inclusivity, noting that even small investors should have the opportunity to participate. She pointed to the introduction of a ₹250 per month systematic investment plan as a step in this direction. 

"When I say it roughly comes to $3 a month, people say they cannot even buy a Starbucks coffee with that. So imagine, with less than $3 a month, people will be able to participate in the wealth creation of our nation," Buch noted.

Buch also highlighted Sebi's use of technology and complexity to ensure inclusivity. Complexity, in this context, includes the introduction of a broader array of products to cater to all types of investors. 

Among the regulator’s recent initiatives, Buch mentioned efforts to ease procedural disclosures and the proposal of new asset classes, as well as the promotion of alternative investment vehicles like Infrastructure Investment Trusts (InvITs) and Real Estate Investment Trusts (Reits).

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In a lighter vein, she quipped, “I can mention Reits, but I utter the word Reits, and there is conflict of interest, so it is better to not say.”