SEBI is engaging with MFs post debt crisis: Tyagi
SEBI is in talks with the domestic fund industry for improving norms and helping them deal with contagion fears emanating from the liquidity-crisis-hit nonbanking finance companies this year, Chairman Ajay Tyagi said. On Friday, Tyagi, who was a keynote speaker at the CII conference in Mumbai, also expressed satisfaction at the resilience of India’s capital market despite the global volatility.
“In terms of volatility and indices’ return, Indian markets have not performed much worse. In fact, they have been better off when you compare with either major developed economies or emerging markets,” Tyagi said.
He said global capital markets have been quite volatile in the current year and are likely to remain so due to uncertainty in oil prices, the move towards more (from left) Leo Puri, Chairman, CII National Committee on Financial Markets; Ajay Tyagi, Chairman, SEBI; and Uday Kotak, President Designate, CII, and MD & CEO, Kotak Mahindra Bank, releasing the CII Report at the CII National Financial Markets Summit 2018, in Mumbai, on Friday
formal monetary policies by central banks across jurisdictions, and the US-China trade spat. These factors have also af-
fected the Indian markets. Citing some data, he said, in AprilNovember returns on Nifty have moved up by about 6.5 per cent.
He said on the domestic front, NBFCs and HFCs have been facing tight liquidity since September, though it has improved on account of steps taken by the RBI to provide systemic liquidity.
Talking to reporters later, Tyagi said SEBI is also in consultations with the mutual fund industry for changes post the liquidity crisis.
“We would gradually take action on that. On any of the policy issues we are examining, in consultation with the industry, we will gradually take appropriate action,” he said.
He said a record amount of ₹8.8 lakh crore was raised from the domestic capital market during 2017-18 (through equity and debt) against the ₹7.7 lakh crore raised during 2016-17. In the current fiscal ₹4.85 lakh crore has already been raised.
Tyagi said the development of other alternative sources of funding such as AIFs, REITs, InvITs and municipal bonds have also been gradually gaining prominence over time and there has been a spurt in AIF activities in the past two to three years, with cumulative commitment going up by 117 per cent from March 2016 to March 2017 and further by 96 per cent March 2017 March 2018.
Tyagi said the regulator is in touch with market participants and if any further changes are warranted relating to REITs, InvITs, or municipal bonds, appropriate action would be taken.
“A vibrant capital market has to play an increasingly pivotal role to facilitate fund mobilisation for sustaining India’s projected economic growth momentum. This role becomes even more important, given the stress on the banking sector,” Tyagi said.