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Business News/ Mutual Funds / SEBI working with mutual funds to make 250 SIP bets viable for industry growth: Madhabi Puri Buch

SEBI working with mutual funds to make ₹250 SIP bets viable for industry growth: Madhabi Puri Buch

The comments from the SEBI Chairperson come on a day the MF industry reported its highest-ever monthly investments through SIPs at over ₹17,000 crore for November.

(File image) SEBI chairperson Madhabi Puri BuchPremium
(File image) SEBI chairperson Madhabi Puri Buch

Securities and Exchange Board of India (SEBI) chairperson Madhabi Puri Buch has said that the capital markets regulator wishes to sachetise mutual fund investments going forward.

Speaking at an event hosted by Business Today, Buch said the mutual fund industry feels investments of 500 per month in a systematic investment plan are viable, but 250 are not and the focus will be to try to look at ways of making such investments rewarding.

"We are working with them (MF industry) to see where is the cost, what can SEBI do to facilitate making it possible to bring that viability down to 250 a month, because then it is the equivalent of what Hindustan Lever did with shampoo sachets. You just explode the market," said Buch.

Also Read: SEBI plans new asset class for high-risk investors

The comments come on a day the MF industry reported its highest-ever monthly investments through SIPs at over 17,000 crore for November. It also comes amid expectations of an aggressive entry by the Reliance Group entity Jio Financial Services into the MF space. Buch said such sachetisation will help the financial inclusion agenda, and also help the Indian capital markets.

Citing the experience of over the last one year, Buch said hardening of rates in the developed markets made foreign investors sell Indian equities, but India was not impacted as much as other emerging markets because the domestic investors held fort and also forced the foreign investors to come back because of the yields the market was offering.

"In effect, the benefit of our domestic flows and the retail flows had a double impact. The impact of them coming in and the impact of the foreign money returning because they couldn't afford to miss the Indian story," she added.

Buch said she will focus on this aspect in the last year of her three-year term, and added that the attempt will also be to institutionalise the reforms and initiatives done over the last few years so that it lasts as long as possible.

She reiterated that rather than ticking boxes by appointing women on boards, it is necessary for companies to employ women across the hierarchy, starting from the key management personnel on top to down below, and added that it is because of this view that SEBI focuses on making the top-1,000 listed companies disclose the share of payments to women in the overall wage bills.

Meanwhile, SEBI is also looking to come out with a framework for the issuance of subordinate units by REITs and InvITs to sponsors and their associates.

Additionally, the regulator has proposed a framework for unit-based employee benefits (UBEB) in the context of REITs (real estate investment trusts) and InvITs (infrastructure investment trusts). SEBI has sought comments from the public till December 29 on the proposals.

Under the proposed framework, subordinate units can be issued only to the sponsor, its associates and sponsor group, such units should carry only inferior voting as compared to ordinary units and the units can be issued to the eligible entities in the initial offer or in any offering subsequent to the initial offer, Sebi said in its consultation paper.

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Published: 09 Dec 2023, 04:19 PM IST
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