Capital markets regulator Securities and Exchange Board of India (SEBI) conducted its board meeting on Monday, September 30 and approved key measures for easing trading practices for regular investors and simplifying norms in the mutual funds (MF) industry. The market watchdog surprised investors by refraining from announcing measures to limit a surge in derivatives trading, as was widely expected by D-Street experts and traders.
Steps Sebi approved at the meeting:
Introduction of a new hedge-fund-like investment product for mutual fund investors that have a higher appetite for risk
Introduction of less stringent regulations for passively managed plans for mutual funds. It lowers requirements for net worth and profitability track record
Widened the definition of a “connected person” in the case of possession of unpublished price-sensitive information. The new rules define a connected person as one sharing a household, a firm, and family members including spouse, in-laws, parents and siblings
An earlier proposal to move from optional T 0 settlement to optional instantaneous settlement is not under consideration for now
The Sebi board mandated application of additional disclosure norms for foreign portfolio investors who use overseas derivatives instruments for trading in Indian equities. It also limited the use of overseas derivatives instruments to only those that have cash equity, debt securities and other non-derivative investments as an underlying