Sebi's unfinished market reforms could be tabled before the next government

Pending capital markets reforms will be placed before financial stability and development council on Tuesday

A team of finance ministry officials led by Arvind Mayaram, secretary, department of economic affairs (DEA), met senior Securities and Exchange Board of India (Sebi) officials and a deputy governor of the Reserve Bank of India on Monday to discuss pending capital market reforms.

These issues will be placed before the Financial Stability and Development Council on Tuesday and collated into a report to be handed over to the next government for the annual budget.

Talking on the sidelines of the Confederation of Indian Industry summit, K P Krishnan, additional secretary, DEA, said there was a need to align the differential commission structure of financial products.

Most financial products including real estate investment trust (REITs), alternate investment funds, venture capital fund have lacked adequate participation from players due to the double taxation.

“We are in discussion with the Central Board of Direct Taxes (CBDT) to award a tax pass-through status to the market instruments. We share the same philosophy as Sebi to reduce the double taxation burden for these instruments,” said Krishnan.

On the issue of REITs, he added finance ministry had reached the final stage of discussion with CBDT and was hopeful it would be cleared in the upcoming budget.

The market regulator had also made representations before the finance ministry for allowing employee provident fund to invest in equities and mutual funds and awarding tax-fillips to mutual funds.