JOIN USSebi to launch ‘regulatory sandbox’ to allow live testing of new products, services
With an aim to facilitate the use of latest fintech innovations in capital markets, regulator Sebi is planning to allow live testing of new products, services and business models for selected customers by providing various relaxations and exemptions.
Initially, all Sebi-registered entities will be eligible to participate in such a ‘regulatory sandbox’ (a live testing environment), while fintech startups and other entities that are not regulated by Sebi may also be allowed at a later stage, but no exemptions would be granted from the existing investor protection framework, KYC and anti-money laundering rules, officials said.
A proposal in this regard will be discussed by Sebi’s board later this month, the officials added. The proposed ‘regulatory sandbox’ is intended to serve as a testing ground for new business models and technologies that benefit investors, Indian markets and the economy at large.
Under this framework, the eligible entities would be granted certain facilities and flexibilities to experiment with fintech solutions in a live environment and on real customers, while ensuring that there are necessary safeguards for investor protection and risk mitigation.
To amend norms for InvITs
Capital market regulator Sebi is planning to amend its investment manager eligibility norms for Infrastructure Investment Trusts and also permit fast track issuance of units to existing investors in REITs and InvITs.
The proposed changes in the eligibility norms will help a mega offering worth an estimated Rs 20,000 crore by the National Highways Authority of India (NHAI), which is in the process of setting up an Infrastructure Investment Trust (InvIT) to monetise its completed public-funded national highways.
A proposal to amend the Sebi regulations for Real Estate and Infrastructure Investment Trusts (REITs/InvITs) will be discussed by the regulator’s board at its meeting later this month to revise eligibility conditions for investment managers in InvITs and for streamlining the process of rights issue of units, officials said.
The InvIT regulations require the investment manager to have at least 5 years of experience in fund management or advisory services or development in the infrastructure sector. Besides, the investment manager needs to have at least two employees, each with five years of experience in the infrastructure sector.