Sebi's Push for Transparency and Capital Formation in Real Estate and Infrastructure
Sebi plans to establish new institutions to enhance investor information quality and is focusing on capital formation for real estate and infrastructure, including initiatives for REITs, InvITs, and municipal bonds.
SebiInvestor InformationCapital FormationReal EstateInfrastructureReal EstateAug 09, 2024
The Performance Validation Agency will validate the claims of performance related to services offered by Investment Advisors (IAs), Research Analysts (RAs), and Algo providers. This move is expected to bring more transparency and accountability to the investment advisory industry.
On the other hand, the Data Benchmarking Institution will provide a central repository of standardized and comparable data related to various asset classes. This will enable investors to make informed decisions based on reliable data.
In addition to these initiatives, Sebi is also proposing to create a closed ecosystem for fee collection by registered IAs and RAs. This will help investors ensure that their payments are reaching only registered entities and avoid unregistered ones.
For the year 2024-25, Sebi has identified capital formation for real estate and infrastructure sectors as a key focus area. The regulator recognizes that these sectors require customized regulations to facilitate growth.
To this end, Sebi has set up an advisory committee for real estate investment trusts (REITs) and infrastructure investment trusts (InvITs). The committee will help understand the needs of the market and its stakeholders.
Sebi also acknowledges that every segment of infrastructure requires a unique solution and that a one-size-fits-all approach may not work. Therefore, regulations may need to be customized to the specific products that the industry needs.
Investment in infrastructure is also crucial for urban local bodies, and municipal bonds are gaining popularity as a means of fundraising for urban infrastructure development.
Sebi is optimistic that with the right policies and support, the REITs, InvITs, and Municipal Bond markets can grow significantly.
Other initiatives planned by Sebi for 2024-25 include a review of voluntary delisting norms and a simplified framework for trades by stock brokers and stock exchanges.
The regulator's efforts to enhance transparency and facilitate capital formation in real estate and infrastructure are expected to have a positive impact on the securities market.
The establishment of new institutions and the customization of regulations will go a long way in promoting investor confidence and supporting the growth of these critical sectors.
As Sebi continues to work towards creating a more robust and transparent securities market, investors can expect better quality information and more opportunities for investment in real estate and infrastructure.
Frequently Asked Questions
What are the two new institutions being set up by Sebi?
The Performance Validation Agency and the Data Benchmarking Institution.
What is the purpose of the Performance Validation Agency?
To validate the claims of performance related to services offered by Investment Advisors (IAs), Research Analysts (RAs), and Algo providers.
What is the role of the Data Benchmarking Institution?
To provide a central repository of standardized and comparable data related to various asset classes.
What is Sebi's focus area for 2024-25?
Capital formation for real estate and infrastructure sectors.
What is the significance of municipal bonds in urban infrastructure development?
Municipal bonds are gaining popularity as a means of fundraising for urban infrastructure development and are crucial for urban local bodies.
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