SEBI forms advisory committee on hybrid securities to facilitate greater retail participation

Markets regulator Sebi has set up an advisory committee on hybrid securities, which will make recommendations for giving a fillip to the growth of such instruments, including measures focusing on ease of issuance and attracting domestic and global capital.

The 20-member committee will be chaired by K V Kamath, Chairperson of National Bank for Financing Infrastructure and Development, an update with the Securities and Exchange Board of India (SEBI) showed.

In addition, the committee comprises top level officials of infrastructure investment trusts (InvITs), real estate investment trusts (REITs), finance as well as legal experts and representatives of Sebi.

REITs and InvITs are classified as hybrid securities and they are relatively new investment instruments in the Indian context but are extremely popular in global markets.

The committee has been given the task of advising Sebi on issues related to development and regulation of primary and secondary markets of hybrid securities in the country.

Further, it will identify use case scenarios of hybrid securities in the context of the infrastructure financing needs of the Indian economy and make recommendations for developing instruments to meet the needs of the infrastructure sector. Also, the panel will make recommendations on infrastructure financing through capital markets.

The panel will also be responsible for making suggestions to facilitate greater retail participation in hybrid securities while ensuring protection of interest of investors and making recommendations for developing engagements with various stakeholders including creating more awareness about hybrid securities amongst investors.

While a REIT comprises a portfolio of commercial real assets, a major portion of which is already leased out, InvITs comprise a portfolio of infrastructure assets, such as highways and power transmission assets.

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Apart from Kamath, the committee has members including Harsh Shah, CEO and Whole-time Director, India Grid Trust; Sanjay Grewal, CEO and Executive Director, Virescent Renewable Energy Trust; Tushar Kawedia, CFO, IRB Infrastructure Developers; Mathew George, CFO, National Highways Infra Investment Managers; Preeti Chheda, CFO, Mindspace REIT; and Aravind Maiya, CFO, Tata Realty and Infrastructure.

Samarth Jagnani, Managing Director at Morgan Stanley; Kranti Mohan, Partner at Cyril Amarchand Mangaldas; Pratichi Mishra, Associate at S&R Associates; Rakesh Vyas, Fund Manager at HDFC Mutual Fund; and Gopikrishnan M S, Finance Professional are the other members of the committee.

Besides, Sebi has reconstituted its research advisory committee, which is responsible for promotion, development, maintenance of databases relevant for capital market regulation research.

The 16-member panel will be headed by V Ravi Anshuman, Professor at IIM Bangalore. Also, Madan Sabnavis, Chief Economist, Bank of Baroda; Pawan Agrawal, Chief Risk Officer at Crisil; Sudhir Bassi, Executive Director at Khaitan & Co; and H K Pradhan, Professor of Finance and Economics at Xavier School of Management (XLRI) are the other members of the panel, an update with Sebi showed.