SEBI Chairperson Madhabi Puri Buch addressed several key issues, ranging from market complexities to the evolving role of mutual funds (MFs) and real estate investment trusts (REITs) at the AMFI event held in Mumbai on Thursday, September 26. She also took the opportunity to dispel recent allegations of conflict of interest, laughingly dismissing them as attempts to create unnecessary controversy.

Speaking on the complexities of modern financial markets, Buch warned that regulatory arrogance is a recipe for failure.

“Markets today are so complex; any arrogant regulator is doomed to fail,” she said. On her focus on mutual funds and REITs, Buch, in a cheeky manner, dismissed the recent controversy surrounding her.

“Sometimes I am asked why I talk about mutual funds so much… Nowadays I talk a lot about REITs. But people say, ‘Oh, why is she talking so much about this? ICICI is involved, etc.’ All this leads to controversy, you see,” she said.

The US-based short seller Hindenburg Research alleged that it suspects SEBI’s unwillingness to act against the Adani Group may be because Buch had stakes in offshore funds linked to the conglomerate.

The short seller had alleged that Buch and her husband Dhaval had invested in one of the funds which was allegedly being used by Vinod Adani. It also flagged Dhaval’s association with private equity major Blackstone, a promoter of multiple real estate investment trusts (REITs) and Sebi’s continued pitch for the new investment avenue.

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The SEBI chief praised the government’s trust in the financial industry, particularly in the bond market and highlighted the necessity of market-making and the need for a corporate bond repo system to boost liquidity

“This industry can’t thank the sovereign enough for placing its trust on this industry. We knew that market-making without corporate bond repo wasn’t possible,” Buch added.

Buch also discussed the creation of an online bond platform to address the challenges of high costs in public bond issuance, aiming to replicate the rapid growth seen in the equity markets.

“Public issuance of bonds was expensive, so we created this vehicle—online bond. We hope that the bond market will rapidly see the growth we saw in the equity market,” she stated.

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