SEBI Board Meeting Amid Friday: Effect on Stock Market and Investors?

SEBI ( Securities Exchange Board of India ), a regulatory body under the domain of ministry of India for securities and commodity market is likey to discuss important topics in its Board meeting which will be happening on Friday.  

Officials are likely to discuss the rules for making it easy for foreign investors, alternative investment funds (AIFs), and portfolio management services (PMS) to do business. Also, officials might be discussing making it even easier for companies to go public, according to some reports.

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Top of Form

SEBI: Same day Settlement (T+0) ?

Earlier this week, the head of Sebi, Madhabi Puri Buch, mentioned that starting from March 28, they plan to introduce a T+0 trade cycle settlement system, initially on an optional basis. This means trades could settle on the same day, ensuring instant settlement.

Currently, the Indian stock market follows a T+1 settlement cycle for all trades. Sebi is expected to discuss this in its board meeting and set out the basic rules for it. The regulator had proposed this instant settlement system in two phases, and more details about its implementation are likely to be shared on Friday.

PMS and AIFs

For Portfolio Management Services (PMS) providers, Sebi might require them to register their distributors with the Association of Portfolio Managers in India (APMI), which would enhance oversight. Additionally, the regulator is expected to propose digital client onboarding processes.

Sebi is considering permitting Category I & II Alternative Investment Funds (AIFs) to use their investee companies' shares as collateral to raise debt, according to reports. Currently, these types of AIFs are not allowed to leverage their investments except for short-term funding needs. Allowing them to pledge their equity holdings, especially in infrastructure sector companies, would enable deeper involvement in this growing sector.

Conclusion

Sebi is likely to discuss those above mentioned topics in the board meeting and it isn't anticipated to introduce any particular measures on Friday regarding the concerns it raised about the bubble in midcap and smallcap stocks, as well as in the SME segment.

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