SEBI Chairperson launches a report on Indian Capital Markets and India’s first website for Passive Funds at NSE

Bengaluru, 31 July 2024 – SEBI Chairperson, Smt. Madhabi Puri Buch, launched a deep dive report on Indian Capital Markets: Transformative shifts achieved through technology and reforms along with India’s first website for Passive Funds at NSE today. Smt. Madhabi Puri Buch also delivered a keynote address on the occasion of the launch. This report covers the most significant reforms, important milestones, and technological innovations in the Indian Capital Markets, steered by the regulator, MIIs and market participants, along with their impact on investors in the country.

Key areas include: –

I. An assessment of recent technological innovations and reforms, several of which are global firsts

II. Findings from a retail investor survey across 12 cities in India

III. A nuanced analysis of benefits to investors (both qualitative and quantitative)

Various outstanding reforms have been driven by The Securities and Exchange Board of India (SEBI), India’s Capital Markets regulator, a frontrunner in strengthening the markets through several initiatives focused on investor enablement, market development and growth, along with risk management and governance.

The report delves into five global first reforms that set the Indian Capital markets apart: –

1. T+1 settlement cycle; introduction of T+0 on optional basis

2. Introduction of Application Supported by Blocked Amount (ASBA) for secondary trading

3. Segregation and monitoring/visibility of collateral at client level

4. Two-way portability among Clearing Corporations through a SaaS module

5. Establishment of Investor Risk Reduction Access (IRRA) platform

Further, analysis of key market reforms revealed that 100% adoption and implementation of certain reforms could lead to significant investor benefit in terms of freed up capital and superior experience. The analysis shows that key changes including ASBA for secondary markets, T+1 settlement, ASBA in primary markets, faster IPO listing could potentially lead to about INR 3900 crores in annual benefits for investors when fully adopted.

Smt. Madhabi Puri Buch, SEBI Chairperson said: “The transformation and growth of our Capital Markets is due to a collective vision to create a resilient, progressive, and technology-driven ecosystem that provides access, information and control to the Indian investor community, while ensuring guardrails for protection. To achieve an enhanced investor experience and enablement, it is critical for all MIIs and market intermediaries to foster a culture of innovation, collaboration, feedback for review of regulations, and swift tackling of emerging risks. We believe that this report would serve as a valuable resource for all our stakeholders.”

Shri Ashishkumar Chauhan, MD & CEO, NSE said: “We are proud to unveil this report which provides a comprehensive analysis of India’s Capital Markets evolution over the years, propelled by active retail participation, sustained and high inflow by domestic institutional investors, and strong performance of listed companies. The market infrastructure institutions (MIIs) and several other market participants have adopted and implemented SEBI’s initiatives with speed and technological agility to make this transformation successful. We would like to thank our regulator, investors, MIIs, and all the stakeholders for their participation and collaboration in this journey.”

To provide a comprehensive platform for retail investors and empower them to easily access information and understand the Indian passive funds industry, a dedicated and India’s first website for passive funds was also announced during the launch event. This website provides in-depth information on aggregate industry data, fund wise data, screeners for selecting funds based on various parameters such as underlying index, AUM, tracking error, tracking difference, trading volume, TER, comparison of funds etc. This website can be accessed on (www.indiapassivefunds.com).