Home > market > stock-market-news > Sebi introduces new products, deepens Indian markets: 7 highlights

The board of capital markets regulator, the Securities and Exchange Board of India, met under new chairman Ajay Tyagi for the first time. Here’s a list of the key decisions the board took to introduce new products and deepen Indian markets.

1) Investors can instantly redeem liquid mutual funds up to 50,000 a day. Sebi also allows investors to use e-wallets to buy mutual funds up to 50,000 per financial year. This move could potentially increase inflows into India’s 8 trillion mutual funds market.

2) Green signal for options contracts in commodity derivatives. This has been pending for a long time; the finance minister had mentioned this in the February 2016 budget. Sebi needs to amend SECC regulations to allow options that have commodity futures as underlying.

3) Non-banking finance companies with a net worth of at least Rs500 crore will be classified as qualified institutional buyers. Half the shares in initial public offers are allotted to QIBs.

4) Sebi to monitor how companies which raise more than Rs100 crore in IPOs use these proceeds. Earlier, the floor was Rs500 crore. The actual monitoring would be done by an external agency.

5) Non-resident Indians will not be allowed to buy participatory notes. Sebi’s frequently asked questions (FAQs) on P-notes say as much, but the regulator is now clearly spelling it out.

6) Bank and public financial institutions get a relaxation relating to preferential allotment to deal better with the bad loans issue. Typically, companies cannot make preferential allotment of shares to any entity which has sold their shares during the six months preceding the issue date. This criteria has been relaxed.

7) Sebi to amend stock brokers regulation so that it can integrate stock brokers in equity and commodity derivative markets. This will enable the same entity to operate in both markets. The finance minister had talked about this while presenting the union budget for the current fiscal.

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