Mumbai3 days ago
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The meeting of the governing body of Security Exchange Board of India i.e. SEBI is going to be held on 30th September. Many matters including index derivatives are expected to be discussed in it. Market regulator SEBI has been trying to strengthen the index derivatives framework for a long time.
The new framework will have a significant impact on the securities market. There will be a reduction in trading of retail investors in derivatives for quick profits. SEBI had released a consultation paper in this regard on July 30.
Weekly Expiry Offer in Index Derivative Contracts The consultation paper proposed only weekly expiry instead of daily expiry for index derivative contracts. There was also a proposal to increase the minimum contract value.
There may also be changes in the rules related to strike prices. In SEBI’s proposal, it was said to initially increase the minimum contract value to Rs 15-20 lakh. Later there was a plan to increase it to 20-30 lakhs. There was also talk of changing the rules related to strike prices.
93% traders suffer loss in F&O trading Finance Minister Nirmala Sitharaman and SEBI Chief Madhabi Puri Buch have expressed concern over the increasing interest of retail investors in F&O. SEBI’s recent report states that 93% of traders suffer losses in F&O trading.
New framework of F&O will be discussed in the board meeting SEBI had sought opinions on its consultation paper till August 30. There is a lot of expectation that the new framework of Futures and Options i.e. F&O will be discussed in the SEBI board meeting to be held on September 30. Apart from this, the launch of Performance Validation Agency is also expected to be discussed in this meeting.
Sebi had submitted a consultation paper about a year ago on the proposal to create a performance validation agency to verify the performance claims of intermediaries, including research analysts (RAs).
Performance Validation Agency will come into existence soon In a program of Industry Chamber FICCI on August 2, Madhabi Puri Buch had said that the Performance Validation Agency will come into existence soon. But, people associated with this matter have said that there are some technical difficulties in making it.
However, RAs, Investment Advisors (IA) and algo traders will keep an eye on the SEBI meeting to be held on September 30. The reason for this is that the opening of the Performance Validation Agency will have a direct impact on their functioning.
Rules related to published issues will be made logical On June 26, SEBI had also talked about making the rules related to public issue logical. This also includes listing regulations along with capital issue and disclosure requirements regulations. These changes will increase ease of doing business.
Classification rules of promoter group companies will change There will also be changes in the rules related to appointment of directors. The rules for classification of promoter and promoter group companies will change. The responsibility of disclosure will be on important positions related to management.