SEBI Chief Madhabi Puri Buch recently shed light on a concept called Sachetization of Market, emphasizing its significance in financial inclusion. Drawing a parallel to the way everyday goods like shampoo became affordable to all, she suggests a similar approach for financial products, particularly mutual fund investments.
What is Sachetization Of Market Proposed by SEBI Chief?
The idea is straightforward: make investing accessible to everyone, regardless of their financial status. By lowering the minimum investment required for products like systematic investment plans (SIPs) to as low as ₹250 per month, SEBI aims to encourage more people, especially those at grassroots levels, to participate in the market. She also talks about lower investment size for municipal bonds, InvITs, and REITs to boost investor diversity and growth.
Madhabi Puri Buch’s analogy to consumer goods packaging, where smaller, more affordable units opened up premium products to a wider audience, resonates with the financial sector. This approach mirrors Wall Street’s strategy of simplifying complex financial products for broader consumption.
Buch’s advocacy for sachetization extends beyond mere accessibility; it embodies a paradigm shift in how financial products are conceptualized and delivered. By breaking down complex investment vehicles into simpler, more digestible formats, Buch aims to demystify finance and empower individuals to make informed investment decisions. This approach mirrors the strategies employed by Wall Street’s investment bankers, who have long championed the simplification of financial products for mass consumption.
However, achieving sachetization requires more than just lowering investment thresholds; it necessitates robust investor education and awareness initiatives. SEBI Chief off late has been proactive in promoting financial literacy and investor education to ensure that individuals make informed decisions about their investments. She was vocal about froth in small cap-mid cap segment. Next, AMFI wrote to MF Houses to limit inflows in small cap, mid cap segment, protect investors and warn them about the same.
Furthermore, SEBI besides regulating the stock market is also actively devising a framework for the issuance of subordinate units by Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs). Proposing a structure for unit-based employee benefits (UBEB) concerning REITs and InvITs, SEBI has solicited public feedback until December 29 on these initiatives. As per the proposed framework, subordinate units would be allocated to sponsors and their associates, carrying diminished voting rights compared to ordinary units, and could be part of the initial offering or subsequent offerings.
Also Read: Explained: New Proposed Rule by SEBI On FPI Investments
