Market regulator Sebi plans to launch smaller SIPs, Reit reforms in FY25

Regulator says it faces difficulty in recovering dues worth over Rs 76,000 crore

The Securities and Exchange Board of India (Sebi) said on Friday that its key areas of work for the current financial year (FY25) included further reducing the minimum investment for mutual funds, faster processing of rights issues, and fostering greater innovations.

The market regulator made public its annual report for the financial year 2023-24 (FY24) on Friday.

“To promote low-ticket systematic investment plans (SIPs) and also to ensure its viability, Sebi and Amfi are in consultation with the industry stakeholders to reduce the overall cost associated with the product to aid financial inclusion,” it said in the report.

The regulator has also formed an advisory committee to focus on capital formation through real estate investment trusts (Reits) and infrastructure investment trusts (InvITs) along with municipal bonds.

Sebi said it would also review the existing rights issue framework to rationalise the disclosure requirements and reduce its timeline. It is also working on a Data Benchmarking Institution (DBI) to provide a central repository of standardised and comparable data related to various asset classes to help investors analyse.

Among other key areas of work are easing regulations and compliance burden, better corporate governance, steps to deepen the corporate bond market, and a framework to deal with malpractices by people using new-age technology to evade laws.

“We cannot predict how macro and micro variables will impact investment behaviour, investment avenues, or portfolio companies. However, what we can do, and we are committed to doing, is this – to help the securities market and its numerous engines to be future-ready, to help the markets be agile and capable of dealing with changes in the future, whatever those changes may be,” said Sebi chairperson Madhabi Puri Buch.

Difficult to recover dues

Sebi is facing difficulty in recovering dues to the tune of Rs 76,293 crore as of March 2024, up 4 per cent from the previous year.

According to the data shared in Sebi’s annual report, out of 3,871 recovery certificates issued by the regulator in various cases, 807 have been certified as difficult to recover. Of this, nearly 78 per cent is due to cases pending before court-appointed committees.

The number of pending appeals in the Securities Appellate Tribunal (SAT) also rose from 749 to 849 at the end of FY24. However, the number of new appeals filed fell. The pending cases in the Supreme Court related to Sebi or SAT have grown from 440 in FY23 to 519 in FY24, and stand at 1,162 cases in the High Courts. Overall, over 4,000 cases are pending before various forums.