Industry came forward for rules on small, medium Reits, says Sebi chief

Sebi implemented regulations for SM Reits aimed at significantly increasing investor interest

Sebi chief Madhabi Puri Buch on Thursday said there has been a positive response to small and medium Reits (real estate investment trusts) and industry players came forward for regulations on such entities.

Recently, the Securities and Exchange Board of India (Sebi) implemented regulations for small and medium real estate investment trusts (SM Reits) aimed at significantly increasing investor interest in fractional ownership of real estate assets.

Speaking at the Global Fintech Fest 2024, Buch spoke about compliances and the role of the regulator and said that industry players came forward for regulations on small and medium Reits.

The remarks by the Sebi chairperson came days after the US short-seller Hindenburg Research alleged that recent amendments to Sebi's REIT Regulations 2014 were made to benefit a specific multinational financial conglomerate.

However, the markets regulator had stated that Sebi (REIT) Regulations, 2014 has been amended from time to time.

Also, Hindenburg had raised questions about a potential conflict of interest involving Buch and private equity major Blackstone. Her husband Dhaval Buch is a senior advisor with Blackstone.

She said that the ultimate objective of Sebi is to create an ecosystem where compliance becomes second nature to market participants, akin to the effortless act of breathing.

"Ultimate objective of Sebi is to ensure compliance becomes the low hum in the background, like breathing," Buch said in her first public appearance since Hindenburg came with its second report earlier this month.

The chairperson is facing allegations by the US short-seller of having stakes in obscure offshore funds linked to the Adani group.

On Sebi's discussion paper on Futures & Options (F&O) trading regulations, she said that 6,000 comments have been received from stakeholders on the proposals.

Sebi, in its consultation paper in July, proposed seven measures, including increasing minimum contract size and upfront collection of option premiums, intra-day monitoring of position limits, rationalisation of strike prices, removal of calendar spread benefit on expiry day and increase in near contract expiry margin.

The regulator stated that these measures are aimed at enhancing investor protection and promoting market stability in derivative markets.