One of the most notable announcements was the introduction of a new investment product under the mutual fund framework, called ‘Investment Strategies’.
New Mutual Fund Product: 'Investment Strategies'
One of the most notable announcements was the introduction of a new investment product under the mutual fund framework, called ‘Investment Strategies’. This new product aims to offer greater flexibility in portfolio construction, bridging the gap between traditional mutual funds and Portfolio Management Services (PMS). It seeks to curb unregistered and unauthorized investment schemes that promise unrealistic returns, which often mislead investors.
The minimum investment for the new product is set at ₹10 lakh per investor, providing higher risk-taking capabilities for larger ticket sizes. SEBI emphasized that the new product would be professionally managed and regulated to ensure adequate safeguards for investors.
Optional T+0 Settlement and Block Deal Window
In a move to enhance market efficiency, SEBI has expanded the number of scrips eligible for the optional T+0 settlement cycle, increasing the scope from the current 25 stocks to the top 500 by market capitalization in a phased manner. Investors will have the option to settle their trades on the same day, and stockbrokers may offer differential brokerage rates for this option.
Additionally, an optional block deal window under the T+0 settlement cycle will be introduced, operating from 8:45 am to 9:00 am alongside the existing block windows under the T+1 settlement cycle.
Faster Rights Issue Process
SEBI has drastically reduced the timeline for rights issues, which will now be completed within 23 working days from the board meeting, down from the previous average of 317 days. This significant reduction in time is expected to make rights issues a more attractive option for companies looking to raise funds quickly, compared to the preferential allotment route.
Further, SEBI has made the appointment of a monitoring agency mandatory for all rights issues, irrespective of size, to ensure transparency in the use of proceeds. Rights issues smaller than ₹50 crore will now fall under the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018.
Revised Disclosure Requirements
SEBI has also announced changes to disclosure requirements to reduce the reporting burden on listed entities. Companies will now have three hours, instead of 30 minutes, to disclose the outcome of board meetings held after trading hours. Additionally, they will have 72 hours to disclose litigations or disputes involving claims against the entity, with all information stored in a structured digital database.
SEBI also introduced a single filing system for listed entities, allowing them to submit reports to one stock exchange, which will then disseminate the information to other exchanges automatically.
Insider Trading Regulations Tightened
SEBI expanded the scope of its insider trading regulations to include a broader definition of "connected persons." The new regulations now apply to individuals sharing a household with a connected person, employees of firms where a connected person is a partner, and distant relatives. The increased scrutiny is expected to close loopholes in the current regulations and reduce opportunities for insider trading.
Introduction of Mutual Funds Lite
SEBI has also unveiled a new framework, Mutual Funds Lite (MF Lite), which is designed to simplify regulations for passively managed mutual funds. The framework lowers barriers related to net worth, track record, and profitability for sponsors, making it easier for new players to enter the mutual fund market. This is expected to increase competition, improve liquidity, and offer more investment options to investors.
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