The Securities and Exchange Board of India (SEBI) has approved a series of significant reforms aimed at enhancing the investment framework and regulatory landscape. The board meeting, held on Monday, saw the introduction of a new asset class for high-risk profile investors, relaxed regulations for mutual funds, and streamlined processes for handling intermediary violations.
The board’s decision to introduce a new asset class is seen
as a move to bridge the gap between mutual funds and portfolio management
services, offering greater flexibility in asset construction for high-risk
investors. This new asset class is expected to attract a segment of investors
looking for more tailored investment options, thereby boosting market
participation and liquidity.
In addition to the new asset class, SEBI has relaxed certain
regulations for mutual funds. These changes are aimed at making mutual funds
more accessible and attractive to retail investors. The board has also approved
measures to streamline the process for handling violations by intermediaries,
ensuring quicker resolution and enforcement of regulatory norms.
Despite these significant developments, the board did not
address the allegations against Chairperson Madhabi Puri Buch. The controversy
stems from accusations of conflict of interest and improper conduct, which have
been a point of contention in the financial community. Critics argue that
SEBI’s silence on the matter undermines its commitment to transparency and
accountability.
While the board’s silence on the Buch controversy was notable, the meeting did result in several other important decisions. SEBI approved 17 proposals aimed at enhancing the investment framework and regulatory landscape. These include measures to reduce the time for IPO listings from six days to three, making additional disclosures mandatory for certain foreign portfolio investors (FPIs), and providing board representation for retail investors in REITs and infrastructure investment trusts (InvITs).
The board also approved changes to the rules governing
primary and secondary markets, mutual funds, and FPIs. These changes are
expected to improve market efficiency and investor protection. However, there
was no announcement related to the derivatives segment, which had been keenly
awaited by market participants.
The SEBI board meeting has thus resulted in a mix of
significant regulatory reforms and lingering controversy. While the approved
measures are expected to enhance the investment landscape, the unresolved
allegations against Chairperson Madhabi Puri Buch continue to cast a shadow
over the regulator’s commitment to transparency and accountability.