SEBI ISSUES NEW GUIDELINES - IMPORTANT KEY POINTS
Essential for All Upcoming Bank Exams
- The Security and Exchange Board of India (SEBI) on 26th April, 2017 announced sweeping changes in norms relating to mutual funds, public issues, capital raising and commodity derivatives after its board met for the first time under New Chairman Ajay Tyagi.
- SEBI allowed new investment and deliverance routes in mutual funds. It strengthened Initial Public Offering (IPO) norms to confirm that fund raised are not wasted, eased existing capital-raising norms to help banks deal with rising bad loans and announced changes in securities contracts norms for better integration of the commodity derivatives market with the securities market.
- Investors can instantly redeem liquid funds up to Rs. 50,000 a day, or 90% of the folio value, whichever is lower. At present, money from compensative a mutual fund gets credited to a customer’s account only on the next working day or two days after the request if it is not done through the Immediate Payment Service (IMPS), fixing liquid funds at a disadvantage to bank fixed deposits. While some funds already provide this instant redemption facility, SEBI has capped the limit at Rs. 50,000.
- SEBI has allowed investors to use e-wallet to buy mutual funds of up to Rs. 50,000 per financial year. This move could potentially increases inflows into India’s Rs. 18 lakh crore mutual funds market. However, salvations of such investments will flow back to the bank account of the unit holder.
- The regulator said e-wallet issuers must not offer any incentive such as cashback payments. It also stipulated that only e-wallet balance loaded through cash or debit card or net-banking (and not credit cards) could be used for such investments.
- SEBI also gave the green signal for option contracts in commodity derivatives and integrated broking activities in equity markets and commodity derivatives markets under a single entity. These two issues were disclosed by Finance Minister Arun Jaitley in the last two budgets.
- For Option trading, SEBI is proposing to amend the Securities Contracts (Regulation) (Stock Exchange and Clearing Corporations) Regulations, 2012. This will approve commodity exchanges to launch options products that can be settled by converting them to futures a day before the expiry of the contract.
- SEBI also made it compulsory for companies to appoint a monitoring agency id their capital market issue size (excluding offer-for-sale component) is more than Rs. 100 crore. Earlier, the floor was Rs. 500 crore. Governance agencies will have to submit their report every quarter now (from half-yearly earlier) and companies will have to publish this report on their websites besides sending to stock exchanges.