SEBI for Instant Settlement in Stock Market, Plans To Bring T+1 Redemption and Allotment for MF: Madhabi Puri Buch

Moneylife Digital Team 26 July 2023

Investor Interest

Announcing moving to a trading+1 (T+1) settlement cycle from the existing T+2 for all scrips from 1 October 2023, market regulator Securities and Exchange Board of India (SEBI) says it is working on instant settlements of transactions in stock markets and, according to its chairperson, the 'day is not far off'. SEBI is also considering allowing the delisting of companies via a delisting offer at a fixed price instead of the reverse book-building procedure. Sharing SEBI's performance for the past year, its chief Madhabi Puri Buch says the market regulator is working to bring the trading+1 (T+1) settlement, as available for buying stocks in the cash market, for redemption and allotment of mutual fund (MF) units.

Speaking with media, Ms Puri Buch says, "SEBI is working on instantaneous settlement in the stock market, which can happen with the unified payments interface (UPI) infrastructure. Even Intraday settlements are possible in the cash equity segment."

SEBI is also considering permitting a promoter to place a delisting offer at a fixed price for shareholders to consider and will bring out a discussion paper on the subject by December.

The regulator is working on several things, including increasing the pace for new issuances for equities and debt market and faster approvals for MF schemes, Ms Puri Buch says.

She also spoke about the need to lower timelines for MF redemption and allotment to T+1 from existing T+2. According to the SEBI chairperson, in an analysis of redemptions worth Rs24 lakh crore from equity and hybrid schemes, investors have gained Rs230 core through the reduction in timelines.

As of 31 March 2023, SEBI had six fresh applications from MF houses pending clearance for over six months. Two applications are pending for three to six months, while four applications are pending for one to three months, the SEBI chief says. She also shared the rationale behind the quick turnaround time between the time it receives an application from a fund house and when the scheme is launched.

Commenting on finance sector influencers or 'finfluencers' who provide information to their followers on various financial products, advising them to invest in particular schemes or financial instruments, Ms Puri Buch reiterated that SEBI would soon come out with a consultation paper on this subject.

However, she clarified that while SEBI cannot directly regulate finfluencers, it can prohibit regulated entities, including stockbrokers and MFs, from dealing with them (finfluencers).

Meanwhile, the department of consumer affairs is preparing guidelines for social media influencers, especially in health and finance, to ensure that they are not pedalling half-baked or misleading information. As per the proposal, finfluencers will have to put out their credentials, making it clear whether they are qualified financial advisers or just promoting a particular scheme or financial product in the garb of investment advisers, thus duping investors in the process.

Comments

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r_ashok41

3 years ago

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