Sebi, US investors discuss reforms in IPO rules, corporate bond market development

Early finalisation of the direct listing scheme, development of the corporate bond market, reforms in IPO norms and digitisation of processes among other issues were discussed between Sebi and investors from the US.

Sebi chairman Ajay Tyagi, along with other officials of the capital markets regulator, had an e-interaction on Tuesday with various stakeholders including industry and investor associations from the US.

The interaction was organised by the US India Strategic Partnership Forum (USISPF).

"We interacted with various stakeholders including the investors in the Indian capital markets from the USA. We briefed them about the key developments of the Indian economy as well as the recent trends in the securities market, especially in this Covid-19 era," Tyagi said in a statement.

He further said the achievements of Indian primary markets, secondary markets and specific products such as REITs (Real Estate Investment Trusts) and InvITs (Infrastructure investment trusts) were highlighted in the interaction.

The participants appreciated various initiatives taken by Sebi, especially with respect to direct listing proposal and creation of new products like REITs and InvITs which have the potential to attract more foreign investment while benefitting domestic economy given its multiplier effect.

"The participants emphasised the need for early finalisation of direct listing proposal; development of the corporate bond market; reforms in the IPO regulations; digitisation of processes; and showed interest in participating in innovative ideas under Sebi's regulatory sandbox framework," the regulator said.

In addition, the attractiveness of the Indian markets despite the Covid-19 impact and the recent surge in foreign investment into India through the FPI (Foreign Portfolio Investors) route was also emphasised in the interaction.

Considering that the largest number of FPIs and about one-third of the total assets under custody of FPIs are from the US, Sebi said the importance of US investments into India was emphasized especially taking into account the growing partnership between the two countries.

The increasing number of registrations of FPIs every year and rising inflows of FPI investment in the Indian equity market signify the sustained interest of foreign investors in the Indian capital markets.

The initiatives taken by Sebi towards ease of participation by FPIs such as simplified registration process, common application form, onboarding during Covid-19 through digital scanning of KYC documents, were also appreciated.