Sebi to Introduce Debt Market Distributors

Mumbai, May 13 (PTI) Capital markets regulator Sebi is evaluating a proposal to introduce a new category of distributors to deepen the debt markets and increase the retail participation, a senior official said on Wednesday.

Whole Time Member Amarjeet Singh cited the successful case of mutual funds and underlined the need for having distributors who can simplify the investment process for retail investors by assisting with KYC formalities, documentation and initiating transactions.

"...one area which we picked up recently is, we are examining a proposal to introduce a specialised category of distributors to increase the reach of debt products," Singh said, speaking at an event organised by industry lobby grouping Ficci here.

Emphasising the importance of distribution, he said this engine determines whether finance remains concentrated in a few hands or it truly becomes a vehicle for broad-based economic participation.


Sticking to the MF space, Singh said, for many investors, particularly the first-time ones, distributors remain the first point of engagement with financial markets.

The number of pre-registered active distributors has grown from 2.4 lakh to 3.4 lakh over the last five years, he said.

He said that the overall assets under management (AUM) should not be the only yardstick with which one should gauge the success of a distributor, and added that other factors such as investor persistence and their behaviours across market cycles, like periods of volatility, quality of service, and grievance redressal, should also be looked at.

"I think we need to evolve that metric. Some of it is not measurable, but nonetheless very important," he said.

Singh also said that there is a need to scale up the micro-SIP (systematic investment plan) bets by the investors.