- By Vaamanaa Sethi
- Tue, 25 Jul 2023 11:55 AM (IST)
- Source:JND
Securities Exchange Board of India (SEBI) chairperson Madhabi Puri, on Monday, briefed the media and acknowledged all the issues relevant to the stock market participants like insider trading, delisting of companies, fin influencers etc.
Simplification of delisting process
The stock market regulator is considering allowing the companies to delist its shares via fixed price instead of the reverse book-building procedure. SEBI will issue a discussion paper on the subject by December, the regulator said.
Puri said that the delisting from the stock market for the companies needs to be simplified. The Sebi chief said, “In Sebi, we don't like Abhimanyus. Nobody should feel that once they get in, they cannot get out. Therefore, we introduced a framework for voluntary delisting.”
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Instant settlement or T+1 settlement cycle
SEBI is urging all the market stakeholders to make instant settlement of transactions a reality in India, the chief said. “One of the things that we think is not very far off is an instantaneous settlement on the stock exchanges. We are currently working on that; we are engaged with the ecosystem and we believe that not in the very far future we will have a mechanism which will facilitate instantaneous settlement of transactions on the stock exchange,” she said.
All the transactions will move to the T+1 settlement cycle October 1, 2023. This means effective from first October 2023, all trades will be settled one day after the date of trade instead of the current T+2 settlement cycle.
”Our markets moved from T+2 to T+1 but the technology stack that we have makes it possible to bring in a mechanism wherein trades can be settled instantaneously with entities getting money and the securities. We believe that in the cash equity segment where T+1 exists, instant settlement can be done.” she further added.
Insider Trading
The market regulator is reviewing the insider trading rules pertaining to ‘trading plans’ to be disclosed by company insiders. She further added that the SEBI is also looking to strengthen rules governing corporate disclosures related to insider trading regulations.
This move will help increase transparency in the trading of securities and will lead investors to make an informed decision as all the market participants will have access to all essential information.
T+1 redemption and mutual funds allotment
Puri further told the media in the press conference that +1 redemption and allotment of mutual fund units would soon be a thing. She further said that the regulator also aims to decrease the time for allotment and redemption of mutual funds to one day.
This means that from the current standard of T+2, redemption and allotment of mutual fund units will also reduce to T+1.
SEBI on financial influencers
The market regulator also said that a consultation paper of financial influencers is on its way. She further said that the market cannot regulate fin influencers as what they recommend in their private capacity cannot be curbed under Indian laws.
However, regulated entities, like stock brokers, mutual funds, and so on will be barred from dealing with fin influencers, engaging with them or having any dealings with them, she added.
