The Securities and Exchange Board of India (SEBI) board has unveiled plans to regulate online platforms offering fractional ownership of real estate assets. These platforms will now need to register under a framework designed for small and medium real estate investment trusts (REITs), part of SEBI's efforts to oversee evolving online investment platforms. Additionally, SEBI announced the implementation of electronic storage for fresh investments by alternative investment funds (AIFs) from September 2024, aiming to enhance transparency.
The board of India's securities regulator, the Securities and Exchange Board of India (SEBI), announced on Saturday its intention to regulate online platforms that offer fractional ownership of real estate assets. These platforms will now be required to register under a framework designed for small and medium real estate investment trusts (REITs). The move is part of SEBI's efforts to bring oversight to the evolving landscape of online investment platforms, particularly those dealing with real estate. During its quarterly board meeting, SEBI also disclosed plans to implement electronic storage for fresh investments made by alternative investment funds (AIFs) starting from September 2024. This digitization initiative aims to enhance transparency and streamline the investment process within the AIF sector. Madhabi Puri Buch, the chairperson of SEBI, emphasized the regulator's commitment to protecting investors, noting that there have been instances of financial losses in equity derivatives trading. While cautioning investors about the risks involved in such trading, Buch clarified that the increased activity in equity derivatives did not pose any significant systemic concerns. The surge in derivatives trading, traditionally a more conservative market segment, has been driven by changes in options contracts on stock exchanges. These changes were implemented to facilitate faster and more cost-effective bets, coupled with the proliferation of online retail trading platforms. Addressing concerns about the extension of market hours, Buch revealed that SEBI has requested feedback from brokers and investors before making any decisions. Notably, she did not explicitly mention the National Stock Exchange, which had proposed evening trading sessions to SEBI. In response to worries surrounding SEBI's plan to allow same-day settlement of equity market trades, Buch stated that concerns were "exaggerated." The regulator believes that such a move would benefit retail investors and intends to proceed with the implementation. Furthermore, SEBI approved new rules for index providers, bringing certain indices frequently used by market participants under its regulatory framework. This decision aligns with SEBI's broader strategy to enhance oversight across various segments of the financial markets. In summary, SEBI's latest announcements underscore its proactive approach to evolving market dynamics. By regulating fractional ownership platforms and introducing digital storage for AIF investments, the regulator aims to strike a balance between fostering innovation and safeguarding investor interests in the dynamic landscape of India's financial markets.
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