Sebi's 5 big announcements all stock market investors must know

On Monday, after market hours, Securities and Exchange Board of India (Sebi) chairperson Madhabi Puri Buch spoke at an out of turn press conference. The Sebi chief acknowledged issues that are relevant to all market participants including insider trading, delisting of companies, influencers, etc. 

1. Simplifying the delisting process

The regulator noted that the process to exit the stock markets for listed companies needs to be simplified and the regulator is working towards it. Sebi chairman equated some companies to the mythological character of Abhimanyu from Mahabharat and said that Sebi does not like ‘Abhimanyus’ who enter the markets and find it difficult to exit. The Sebi chief said there is a proposal to allow fixed-price delisting. 

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.”

2. Instant settlement in Indian markets not far away

Sebi is engaging all market stakeholders to make instant settlement of transactions a reality in India, said the Sebi chief.

“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.

She explained that although Indian markets are one of the fastest in the world, she believes that the process can be further accelerated in the back of the Indian tech stack.

The chairperson of the markets regulator further highlighted, ”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.”

3. Corporate disclosures around insider trading

The Indian markets regulator is looking at reviewing the insider trading rules pertaining to ‘trading plans’ to be disclosed by company insiders, the Sebi chief noted at the press conference on Monday.

She said that the market regulator is looking to strengthen rules governing corporate disclosures related to insider trading regulations. The move is aimed at increasing transparency in the trading of securities, ensuring that all market participants have access to essential information and are equipped to make informed decisions.

4. T+1 redemption and allotment for mutual funds

In the out of turn press conference on Monday, the Sebi chief noted that T+1 redemption and allotment of mutual fund units would soon be possible. 

She noted that there is already a T+1 settlement in buying stocks in the cash market. She added that SEBI aims to reduce the allotment and redemption of mutual fund units 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.

5. Sebi chief on finfluencers

The markets regulator reiterated that a consultation paper on Finfluencers is on its way soon. 

The Sebi chief explained that the regulator cannot regulate finfluencers as what they recommend in their private capacity cannot be curbed under Indian laws. However, she added that regulated entities, like stock brokers, mutual funds, and so on will be barred from dealing with finfluecners, engaging with them or having any dealings with them.