SEBI Aims to Democratize Mutual Fund Investments

SEBI Aims to Democratize Mutual Fund Investments

VoM News Desk | December 14, 2023 | 10:52 AM IST | Breaking News | Follow on Google News

SEBI Aims to Democratize Mutual Fund Investments Image/SEBI

SEBI Aims to Democratize Mutual Fund Investments

Madhabi Puri Buch, chairperson of the Securities and Exchange Board of India (SEBI), highlighted the regulator’s intention to make mutual fund investments more accessible to the masses during an event hosted by Business Today.

Buch emphasized the need to bring down the threshold for systematic investment plan (SIP) contributions, aiming to make smaller investments, as low as ₹250 per month, viable and rewarding.

Buch drew parallels with Hindustan Lever’s strategy of introducing shampoo sachets, indicating that lowering the investment threshold could potentially revolutionize the market, similar to how sachetization made products more affordable and widely accessible.

The remarks coincide with the mutual fund industry reporting record-high monthly SIP investments of over ₹17,000 crore in November. Buch outlined how making SIPs more accessible could support financial inclusion efforts and further fortify the Indian capital markets.

Reflecting on recent market trends, Buch highlighted that despite foreign investors selling Indian equities due to rising rates in developed markets, domestic investors held their ground.

This not only shielded India from major impacts but also compelled foreign investors to return due to the lucrative yields offered by the Indian market.

In her final year of the three-year term, Buch indicated a focus on cementing reforms and initiatives for long-term sustainability. Emphasizing gender diversity, she stressed the need for companies to have women represented across management hierarchies, rather than just on boards.

SEBI’s push for the top 1,000 listed companies to disclose the share of payments to women in wage bills aligns with this vision.

Additionally, SEBI is exploring frameworks for subordinate unit issuance by Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs).

Seeking public feedback until December 29, the proposed framework ensures the issuance of subordinate units to specific entities, carrying inferior voting rights compared to ordinary units.

These units could be issued during the initial offering or subsequent offerings, as outlined in SEBI’s consultation paper.

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VoM News Desk

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