Sebi board meeting today: F&O rules, Hindenburg claims, employees complaint | News on Markets

Meanwhile, here’s what to expect from Sebi board meeting:

According to reports, the regulator may potentially discuss the tightening of regulations for futures and options (F&O) trading, driven by major losses incurred by individual traders.

That apart, the Sebi board could discuss the introduction of a new asset class between mutual funds and portfolio management services to offer investors more diversity in investment management.

Other discussion points 

Sebi Chairperson Madhabi Puri Buch recently hinted at upcoming ‘MF lite’ regulations aimed at easing compliance for mutual funds focusing on passive schemes. Detailed consultations are underway to facilitate the distribution of these funds.

The markets watchdog proposed to streamline rights issues by eliminating the need for companies to file a draft letter of offer. Essential details like purpose, pricing, and entitlement ratio will suffice, significantly reducing the approval time.

Additionally, proposals to simplify certification for research analysts and investment advisors include allowing a graduate degree instead of a postgraduate degree, requiring only one exam, and removing work experience and net worth prerequisites, will also be discussed. 

Sebi further aims to boost insider trading regulations by broadening the definition of “connected persons” and including new categories. This aligns definitions with the Income Tax Act and adds individuals with significant financial ties.

To expedite enforcement against intermediaries, Sebi plans to reintroduce ‘summary proceedings’ for straightforward violations, streamlining the regulatory process.

A new classification for merchant bankers is proposed, separating them into two categories based on net worth. Existing firms will have a two-year transition period to comply with the new requirements.

Sebi may also discuss establishing a Performance Validation Agency to verify performance claims made by registered intermediaries like investment advisors and portfolio managers.

Sebi employee dissatisfaction, Hindenburg claims

According to market experts, employee dissatisfaction may be discussed informally by the Sebi board today, with measures to address and resolve these issues anticipated.

Additionally, while the allegations from Hindenburg Research and the Congress party may not be formally discussed, they are expected to be touched upon informally.

Background

Earlier, Hindenburg Research had accused Buch and her husband of holding investments in offshore funds linked to Vinod Adani, the brother of Adani Group chairman Gautam Adani.

The report alleged these funds were used to manipulate stock prices of the Adani Group’s listed companies in India.

Furthermore, it claimed that Sebi altered rules regarding real estate investment trusts (REITs) to benefit Blackstone, where Buch’s husband serves as a senior advisor.

The Congress party also accused Buch of trading in listed securities and selling employee stock options from her tenure at ICICI Bank while she was at Sebi. They allege she profited from her advisory firm, potentially breaching Sebi’s conflict of interest regulations.

First Published: Sep 30 2024 | 9:51 AM IST