The Securities and Exchange Board of India (SEBI) has decided not to bring out any regulations for crowd funding as of now. The board is currently in the midst of evolving guidelines for funding arrangements for startup entrepreneurs. SEBI is evolving these guidelines in consultation with the central government. These observations were made by Mr. Rajeev Agarwal, a wholetime member at SEBI.
Speaking at a Seminar on Energizing SME Exchange, ITP and Dissemination Boards Platforms under the aegis of PHD Chamber of Commerce and Industry, Mr. Agarwal pointed out that the issue of crowd funding has been discussed in detail by the International board of SEBI. He also added that the issue has not been discussed in a detailed manner in advanced economies such as Europe and United States and that a country like India needs to wait for sometime before contemplating on bringing out directives and regulations on the matter.
Mr. Agarwal also added that the Finance Minister, Arun Jaitely, had allocated funds to the volume of Rs.10,000 crores to extend funding facilities for Small and Medium Enterprises (SMEs) and other splinter groups such as early stage startups in the budget for the year 2014-15. The money allocated is yet to be utilized for the desired objective.
The government and SEBI are together making guidelines for the optimum utilization of the above mentioned fund. A special focus is being given to the young entrepreneurs in the allocation of funds, as they are the ones who would evolve into macroeconomic and financial entities in the future. The funding will help these young entrepreneurs strengthen their base.
According to Mr. Agarwal, SEBI would continue with its commitment to promote trading in SMEs exchanges and protect the retail investors within the existing guidelines. He also expressed the board’s inability to further broad base policy measures on the regulation of SMEs exchanges as the existing guidelines are considered sufficient to do justice to their regulation.
However, Mr. Agrawal also added that SEBI is open to accepting the suggestions of the industry and subsequently include these suggestions on further policy making as and when the time for broad basing of the existing SMEs exchanges is right.
