In a major step to modernise and enhance the market operations, the Securities and Exchange Board of India (SEBI) has given the green light for same-day settlement (T+0) for a select group of stocks, among a raft of other measures.
Here is a breakdown of the key decisions made:
T+0 Settlement for Limited Scrips and Brokers
Initially, the SEBI’s approval for the T+0 settlement comes with certain limitations. It will apply to just 25 stocks and a restricted number of brokers. This move is expected to infuse agility and efficiency into the trading operations.
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Extension and Review Timeline
SEBI chairperson Madhabi Puri Buch had earlier indicated a target date of March 28th for the implementation of the T+0 settlement cycle. SEBI plans to conduct stakeholder consultations, including beta version users and review progress after 3 to 6 months before deciding on further steps.
Exemptions and Flexibility for FPIs
Moreover, the SEBI has decided to grant more Foreign Portfolio Investors (FPIs) exemptions from detailed disclosures, easing timelines for certain disclosures and allowing flexibility in handling securities post-registration expiry. Concentrated FPI holding in listed companies meeting specific thresholds will be exempted from granular disclosures.
Streamlining IPO Processes
The SEBI board has given the nod for simplifying Initial Public Offerings (IPO) processes. Among the changes, the requirement of a 1% security deposit for public or rights issues has been scrapped now. Additionally, there are new avenues for meeting the minimum promoters’ contribution (MPC).
Rumour Verification Norms for Listed Companies
Further, the SEBI has approved the framework for verification of market rumours, proposed by the Industry Standards Forum. Listed companies will now have 24 hours to confirm deny or clarify rumours impacting stock prices. Promoters directors, and key managers are mandated to respond promptly to rumours concerning them.
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Regulations for AIFs
SEBI has asked the Alternative Investment Funds (AIFs), Key Managerial Personnel (KMPs) and managers to conduct mandatory due diligence for investors and investments to tackle the circumvention of regulations via AIFs. The implementation standards will be formulated by a pilot Industry Standards Forum in consultation with SEBI.
Recognition of Stock Exchanges
SEBI has also acknowledged stock exchanges as bodies for the administration and supervision of research analysts and investment advisors, further cementing their role in maintaining market integrity.
These sweeping changes reinforce SEBI’s commitment to fostering a dynamic and robust market ecosystem while ensuring investor protection and transparency at the same time.
