Mr. Ajay Tyagi recently stepped down as SEBI chairman after over 5 years of service. Here are some of the major moves undertaken by SEBI under his guidance
1) 2017 and 2021 were some of the largest IPO โseasonsโ but many IPOs also caused wealth destruction for investors. While many criticise SEBI for not being more proactive, it's a thin line in terms of having safer primary issues and fewer primary issues.
2)SEBI proposed framework of a gold exchange and a social stock exchange which can lead to funding of not for profit organisations and for profit social ventures. Gold exchange will have trading of electronic gold receipts which will lead to better pricing and liquidity for gold.
3)SEBI has taken several steps towards deepening India's corporate bond markets by setting up a committee, deciding market making mechanisms, giving clarity on bankruptcy laws, reporting system, demand for bonds, etc.
While the dream hasnโt been achieved yet, Mr. Ajay Tyagi has laid the foundation for a liquid bond market.
4)SEBI has introduced new FPI norms to improve the ease of investing in India.
5)REITs and InvITs used to trade in lots of 200 which meant even if the price of the REIT was Rs. 250, you needed Rs. 50,000 to invest in REITs which was difficult for retail investors.
Liquidity was also a problem since fewer people would be available to buy and sell at these quantities (booking partial profit or doing SIP is tough). The minimum trading lot was removed so each REIT and InvIT trades just like a share.
6)If you wanted to do a public issue of bonds, minimum amount that you could raise was 100 crores. That means accessing capital markets was not possible for smaller companies. This requirement was eliminated last year so even smaller companies could access capital markets.
7)Many investors were mis-sold AT1 bonds. People were calling AT1 bonds of Yes Bank as Super FDs. So SEBI increased the minimum ticket size to 1 crores and only qualified institutional buyers could purchase them.
Not to mention, AT1 bonds couldnโt be classified as short term bonds after some liquid funds started holding them to increase returns.
8)SEBI mandated that mutual fund employees like fund managers should invest 20% of their salary in mutual fund units so that incentives of both fund managers and mutual fund investors are aligned (skin in the game) and managers donโt take unnecessary risks to outperform index.
9)SEBI made stock exchanges liable to pay for technical glitches after traders lost millions of dollars in multiple NSE glitches. And not just the exchange but also the top management.
10)SEBI asked CAMS and KFinTech to create a centralised mutual fund platform where all the folios can be accessed, investments can be made along with non-financial transactions like changing phone numbers or address.
In his 5+ years of work as Chairperson, Mr. Ajay Tyagi has done an admirable job towards improving the structure of our markets and protecting retail investors.
Ms. Madhabi Puri Buch has some big shoes to fill. Wishing her all the very best for the journey ahead...
Ms. Madhabi Puri Buch has some big shoes to fill. Wishing her all the very best for the journey ahead...
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