Sebi to form fintech panel, route household savings to markets
NEW DELHI: Regulator Sebi today said it will very soon form an advisory committee on financial technology, which will mobilise household savings into financial markets through technology solutions.
Besides, a new framework will be in place for listing of security receipts issued by asset reconstruction companies on stock exchanges in the next financial year, Sebi chief U K Sinha said at the 11th Digital India summit here.
"Sebi will create a very strong advisory committee on fintech, which comprises big business leaders from financial technology companies and experts. We would form this committee very shortly," Sinha said.
He further said there is a huge potential for channelising household savings into capital markets for growth of the country and the committee will help in achieving this goal.
"With the economy doing well and a well-regulated market, the current numbers for household savings invested in capital markets are unacceptable," Sinha said.
"I feel that people are ready to invest, but issues related to convenience are holding them back, such as getting KYC done."
On crowd-funding, Sinha said this is an area where "we have come out with a discussion paper", but the industry terms the norm as very restrictive.
"We had issued a discussion paper on allowing crowd-funding, but most comments we received, especially from your industry (tech startups), termed the proposed norms as very restrictive," the chairman said.
"If you want to raise money in the bond market, one has to file a draft red herring prospectus, make lots of disclosures, get a credit rating and appoint a debenture trustee," he said, adding that even other advanced countries like New Zealand and the UK that allowed crowd-funding of ventures have imposed certain restrictions.
To enhance capital flows into the securitisation industry and check bank non-performing assets (NPAs), Sinha said the regulator will be working on allowing listing of security receipts issued by asset reconstruction companies (ARCs)on stock exchanges, which was announced in the Budget this year.
"The discussion in this regard would start soon. It would not take much time. We have some model in mind and in the next financial year, a framework would be in place to allow listing of security receipts issued by ARCs on stock exchanges," he said.
Speaking about regional stock exchanges, the Sebi chief said 20-22 regional stock exchanges have closed in the last three years under the exit policy of the regulator, which include Bangalore, Hyderabad and Madras stock exchanges.
Sinha is confident that the fintech committee will help address the issues and mobilise domestic savings, which will spur growth of the economy.
Reiterating the importance of convergence of policy and the regulatory agencies, Sinha said he endorses the IFC draft code and believes that there has to be an ongoing dialogue with the industry to move forward.
On the importance of harnessing technology, he underscored the importance of Sebi moving fast and realigning with the changing times. As a regulator, he acknowledged, Sebi has its limitations, but still has some distance before crypto currency can be used to buy stocks in the market.
Besides, a new framework will be in place for listing of security receipts issued by asset reconstruction companies on stock exchanges in the next financial year, Sebi chief U K Sinha said at the 11th Digital India summit here.
"Sebi will create a very strong advisory committee on fintech, which comprises big business leaders from financial technology companies and experts. We would form this committee very shortly," Sinha said.
He further said there is a huge potential for channelising household savings into capital markets for growth of the country and the committee will help in achieving this goal.
"With the economy doing well and a well-regulated market, the current numbers for household savings invested in capital markets are unacceptable," Sinha said.
"I feel that people are ready to invest, but issues related to convenience are holding them back, such as getting KYC done."
On crowd-funding, Sinha said this is an area where "we have come out with a discussion paper", but the industry terms the norm as very restrictive.
"We had issued a discussion paper on allowing crowd-funding, but most comments we received, especially from your industry (tech startups), termed the proposed norms as very restrictive," the chairman said.
"If you want to raise money in the bond market, one has to file a draft red herring prospectus, make lots of disclosures, get a credit rating and appoint a debenture trustee," he said, adding that even other advanced countries like New Zealand and the UK that allowed crowd-funding of ventures have imposed certain restrictions.
To enhance capital flows into the securitisation industry and check bank non-performing assets (NPAs), Sinha said the regulator will be working on allowing listing of security receipts issued by asset reconstruction companies (ARCs)on stock exchanges, which was announced in the Budget this year.
"The discussion in this regard would start soon. It would not take much time. We have some model in mind and in the next financial year, a framework would be in place to allow listing of security receipts issued by ARCs on stock exchanges," he said.
Speaking about regional stock exchanges, the Sebi chief said 20-22 regional stock exchanges have closed in the last three years under the exit policy of the regulator, which include Bangalore, Hyderabad and Madras stock exchanges.
Sinha is confident that the fintech committee will help address the issues and mobilise domestic savings, which will spur growth of the economy.
Reiterating the importance of convergence of policy and the regulatory agencies, Sinha said he endorses the IFC draft code and believes that there has to be an ongoing dialogue with the industry to move forward.
On the importance of harnessing technology, he underscored the importance of Sebi moving fast and realigning with the changing times. As a regulator, he acknowledged, Sebi has its limitations, but still has some distance before crypto currency can be used to buy stocks in the market.
