New Delhi: To deepen capital markets, Sebi today pitched for allowing investment of pension money into various securities instruments and to create an enabling environment for REITs to flourish, as Finance Minister Arun Jaitley reviewed the state of capital markets in the country.
In his first post-Budget meeting with Sebi's board, Jaitley also discussed the capacity building and other infrastructure needs for merger of commodities regulator FMC with Sebi to create a unified markets regulator.
Jaitley also discussed the recent trends related to investments by foreign portfolio investors and domestic institutional investors in the securities markets.
After addressing the board members of the Securities and Exchange Board of India (Sebi), Jaitley said he also discussed various issues confronting the regulator, its functioning vis-a-vis new proposals in the Budget and the roadmap ahead.
"They (Sebi) talked about capacity building at Sebi, both in terms of ability to acquaint with the subjects and other infrastructure requirements," the Finance Minister said about the discussions on FMC merger during his customary post-Budget address to Sebi board.
Jaitley was accompanied by Minister of State for Finance Jayant Sinha during his interaction with Sebi's board and other senior officials of the markets regulator.
Besides Sebi Chairman U K Sinha, its 8-member Board includes three Whole Time Members (Prashant Saran, Rajeev Agarwal and S Raman), an independent director and nominees of Finance Ministry, Corporate Affairs Ministry and RBI.
Sebi later said in a statement that its Chairman apprised the Finance Minister of the recent developments in the Indian securities market and the initiatives taken by the regulator.
"He also highlighted the announcements related to the securities market in the Union Budget for 2015-16 and consequent action being taken by Sebi," the regulator added.
"Jaitley discussed the recent trends related to investments by foreign portfolio investors and domestic institutional investors in the securities market. Need for pension money to come to the Indian securities market was particularly emphasised.
"Potential with respect to entry of REITs (Real Estate Investment Trusts) in the market was also discussed. The Finance Minister also took note of the roadmap of FMC's merger into Sebi," Sebi said.
Sebi last year put in place a new set of norms for REITs to help companies raise funds through this route, while the government has also provided for certain tax benefits, including in this year's Budget proposals.
However, there has not been much enthusiasm for launch of such funds so far, although the industry sees potential for raising capital to the tune of USD 20-25 billion through this route and has sought some more benefits in this regard.
On the proposal to set up India's first International Financial Services Centre (IFSC) in Gujarat's GIFT City, Jaitley said that Sebi and RBI making a proposal in this regard.
While Sebi board later approved the final guidelines in this regard, RBI is expected to follow the suit soon. Later in the day, Jaitley also addressed the RBI board.
The 17-member RBI Board comprises of Governor Raghuram Rajan, four Deputy Governors, nominees from Finance Ministry, industry representatives and other experts.
"The convention is that I meet the Sebi board this time of the year. This is also the time to review the state of economy and the state of capital markets, issues which are confronting Sebi, their functioning vis-a-vis new proposals in the Budget and how we see the roadmap in coming months.
"These are subjects on which Sebi gave us a presentation and on basis of that we had interaction," Jaitley said.
Sebi Chairman U K Sinha said some of the points discussed with the Finance Minister was with regard to the Budget announcements and how Sebi is going to take up the responsibilities and what is the road map. Sebi has apprised the Finance Minister of that, he added.
