Small and medium REITs have received a positive response from the industry, SEBI chairperson Madhabi Puri Buch said on Thursday.
Buch said that there is an imbalance of power between large institutions and small investors, and regulations have helped foster trust in the system.
“When SEBI launched a concept on small and medium REITs, the industry feedback was very positive; they wanted to be regulated. They were operating in an unregulated environment and were suffering because investors did not have faith in their product as it was unregulated. They weren’t sure that the issuers would follow any rules,” Buch said while addressing the Global Fintech Festival held in Mumbai.
She said the regulator has been working hard to ensure standardisation in the market ecosystem and reduce the ageing of new applications of public issues. Market infrastructure institutions are fully adopting application programming interfaces.
AI initiatives
“We have almost a dozen projects using AI, which are in the works, half of which will speed up our approval process and half our supervision process. A lot of that ageing will reduce further because we will actively use AI to deliver this,” the SEBI chief said.
The regulator has established 16 different working groups to focus on ease of doing business or compliance. SEBI has received 317 recommendations from various sources and it is at different stages of implementation, she said. Seventy per cent of those recommendations have been accepted.
Regulatory Consultation
Buch said the market regulator consults a lot before issuing any circulars. SEBI received 6,000 responses on its F&O consultation paper issued last month, and automation was used to collate and process this information.
When innovation arises, it is in the grey area of yes and no, she said. Which of those are light grey and which ones are dark grey need to be seen.
Investor Protection
“If you are doing something that enhances the well-being of a consumer nine times out of ten , the regulator will say yes. It may impose some restrictions, but it will say yes. But when the investor is being shortchanged, there is opacity, there is a lack of concern on what is happening to investor’s money, then nine times out of ten, the regulator will say no,” she said.
She said that compliance should become a ‘low hum in the background’ for every entity it regulates.
“This is our ultimate objective in SEBI that every entity we regulate, compliance should simply be a low hum that goes on in the background. It is like each one of us is just breathing, and we are not having to think about breathing,” said Buch.