The Finance Ministry has indicated that the Securities and Exchange Board of India (SEBI) and the Insurance Regulatory and Development Authority of India (IRDAI) could consider introducing the ‘investor charter’ as part of the regulatory framework.
“It is up to SEBI and IRDAI to consider ‘investor charter’ as part of regulatory compliance,” Economic Affairs Secretary Tarun Bajaj told
Finance Minister Nirmala Sitharaman, in her Budget speech, said, “I propose to introduce an investor charter as a right of all financial investors across all financial products.”
This charter appears to be on the lines of the taxpayer’s charter introduced in the Budget 2021 and has statutory backing. It defines the rights and obligations of the tax-payers as well as the department.
Unified legislative system
On the proposal for unified legislative system for the securities market, Bajaj said a high-level group will deliberate on the issue and accordingly suggest the way forward. Sitharaman proposed to consolidate the provisions of SEBI Act, 1992, Depositories Act, 1996, Securities Contracts (Regulation) Act, 1956 and Government Securities Act, 2007 into a rationalised ‘single securities markets code.’
According to Bajaj, these Acts have undergone a lot of changes. “The aim is to simplify the regulatory framework, improve the compliance and look at the future needs of the market,” he said.
The Budget has proposed gross borrowing of around ₹12-lakh crore. Bajaj said the roadmap has been laid for borrowing through long and short-term instruments. The Finance Ministry has been in touch with the RBI and SEBI to make such instruments more attractive to small investors.
Though G-Secs are safe as they carry government guarantee, they donot find much favour with small investors. This is because the benchmark 10-year G-Sec coupon rate has dipped below 6 per cent and tax has to be paid on the return. Even the special bond with coupon rate of 7 per cent plus does not attract small investors, according to Bajaj.
He hopes the inclusion of Indian sovereign bonds in global indices such as JP Morgan and Bloomberg will boost foreign flows as many overseas funds are mandated to track global indices.
The move will also help bring in large passive investments from overseas. As a result, more domestic capital would be available for industry as crowding out would be reduced.