by admin | May 25, 2021 | Economy, Markets, News
By Rituraj Baruah and Rohit Vaid,
Mumbai : Even as the equity brokers are trying to figure out a way to cope with the longer trading hours on equity derivatives, many feel the benefit of “real-time” alignment with global markets would outweigh infrastructure challenges.
Some Indian brokerage majors have already started to shore-up their manpower and other resources after the Securities and Exchange Board of India (SEBI) permitted stock exchanges to extend trading hours for the equity derivatives from October 1, 2018.
The market regulator has allowed stock exchanges to set their trading hours between 9 am and 11.55 pm, similar to the trading hours for commodity derivatives segment.
At present, trade in equity derivatives takes place from 9.15 am till 3.30 pm.
Equity derivative are instruments whose value is at least partly derived from the underlying equity security. Such derivates can be used to hedge the risk associated with taking a position on equity by setting a limit on losses.
“Currently too, commodities markets are opened till midnight, so the learning and infrastructure is already in place. It is just about increasing headcounts, which can be better planned once more details are published by exchanges,” Santanu Syam, Chief Operating Officer of Angel Broking, told IANS.
“From customers’ perspective it is a positive step as they can take benefit of any global news or impact. Currently most of them are not able to participate during such odd hours,” he added.
“It’s a welcome move as Indian markets would be aligned with all major markets, beginning with Tokyo and (ending with) New York and all in between,” Tradebulls Securities’ Director and COO Dhruv Desai said.
“As of now we see an escalation in the manpower of our advisory teams in the offline business and some minor staff increases in the risk management and other back office units. We may need some staff to work on shifts as change settles down,” said Desai, adding that the online business would have no impact as the requisite infrastructure was adequate to manage the extended hours.
According to him, initially, the market volume would spread across the number of hours, but over a period of time, the volume would increase in the market.
However, details are still awaited on risk management system from stock exchange, working of clearing corporations, framework for settlement process, monitoring of positions, system capability and surveillance systems.
The advantage of digital framework, which India currently has, will come in handy, said Equity99’s Senior Research Analyst, Rahul Sharma.
“All the market management processes are digitised. There should not be any transition issues for brokers. However, their fixed costs could go up as the brokers will need more manpower. Let’s hope for the best that rise in volumes will offset the expenses,” Sharma told IANS.
(Rituraj Baruah can be contacted at rituraj.b@ians.in and Rohit Vaid at rohit.v@ians.in)
—IANS
by admin | May 25, 2021 | Investing
Mumbai : Securities markets regulator Sebi on Tuesday said that investments made by two or more foreign entities with a “a common beneficial” owner will be treated as a single FPI entry.
The regulator said this in a circular “clarification on clubbing of investment limits of foreign government or foreign government related entities”.
“In case, same set of beneficial owners are constituents of two or more FPIs and such investor(s) have a common beneficial ownership of more than 50 per cent in those FPIs, all such FPIs will be treated as forming part of an investor group…,” the circular said.
“… the investment limits of all such entities shall be clubbed at the investment limit as applicable to a single foreign portfolio investor.”
As per the circular, Sebi has “been monitoring investment by foreign governments and their related entities viz foreign central banks, sovereign wealth funds and foreign governmental agencies registered as foreign portfolio investors in India”.
The regulator said that purchase of equity shares of each company by a single FPI or an investor group will be below 10 per cent of the total paid up capital of the company.
—IANS
by admin | May 25, 2021 | Commodities, Commodities News
Mumbai : Capital market regulator Securities and Exchange Board of India (Sebi) on Wednesday hiked the ratio between highest to lowest transaction charges in “the turnover slab” levied by Commodity Derivatives Exchanges.
“The exchanges will ensure that the ratio between highest to lowest transaction charges in the turnover slab of any contract is not more than 2:1,” the regulator said in a circular adding that the new provision will be effective from 30 days of the issue.
At present, the ratio between highest to lowest transaction charges in the turnover slab of any contract is not more than 1.5:1.
In September 2016, Sebi had prescribed norms for commodity derivatives exchanges while levying transaction charges for the commodity derivatives trade.
The Commodity Derivatives Exchanges levy different transaction charges for different commodities’ contracts and even in the case of contracts of the same commodity.
—IANS
by admin | May 25, 2021 | Business, Commodities, Commodities News, Commodity Market, Economy, Investing, Large Enterprise, Markets, News
Mumbai : The Securities and Exchange Board of India (Sebi) on Thursday gave its nod to the convergence of both equities and commodity-backed stocks on exchanges from October 2018.
The decision taken at the Sebi’s Board Meeting was announced by the regulator’s Chairman Ajay Tyagi.
Tyagi said the convergence will be effective from October 2018 and will help in cross-listing and provide investors with access to various asset classes.
The move will allow major players like BSE, NSE to introduce commodity-backed financial instruments on their platforms, while MCX and NCDEX will be allowed to list equities and equity F&O.
The Union Budget 2017-2018 had proposed to further integrate commodities and securities derivative markets. The integration has been achieved in two phases.
“… The board approved the proposal to remove the restrictions by making suitable amendments to Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporation) Regulations, 2012 (“SECC Regulations”). The amendments to the SECC Regulations would be effective from October 1, 2018,” the regulator said in a statement.
According to Deepak Jasani, Head, Retail Research, HDFC Securities: “The move will allow bourses like the NSE and BSE to launch commodity products on their platforms.”
“This convergence will help an individual to have one account to trade in all asset classes. SEBI is also looking to simplify and rationalise norms for REITs (real estate investment trusts). SEBI Chairman said that the securities receipts can now be listed and traded on stock exchanges,” Jasani told IANS.
The decision had a mixed impact on the scrip of listed stock and commodity exchanges. Shares of BSE closed on a higher note at Rs 944 per share — up Rs 33.05 or 3.63 per cent.
In contrast, scrip of MCX closed 5.55 per cent lower at Rs 938.55 per share.
On its part, BSE welcomed Sebi’s decision to allow convergence of stock and commodity exchanges.
“BSE believes this decision will help participants in various markets a highly regulated, safer, more transparent trading, clearing and settlement framework when implemented fully,” said BSE’s MD and CEO Ashishkumar Chauhan.
“BSE has geared up itself for long to provide these facilities to its more than 3.71 crore registered investors.”
Angel Broking’s Head Advisory Amar Singh said: “The move is expected to broaden the markets and this key reform will go a long way in developing the Indian financial markets in years to come.”
Sebi in its last Board meet for 2017 also enhanced eligibility requirement for CRAs (Credit Rating Agencies), restricted crossholdings amongst them and added provisions for withdrawal of their ratings among others.
Ratings agency CRISIL said that Thursday’s decision will raise industry standards and deepen the corporate bond market in India.
Higher minimum net worth requirements for CRAs and increased shareholding requirements along with minimum holding period for promoters of CRAs will ensure that only serious and credible players with long-term perspective enter the field, CRISIL said.
CRISIL’s Managing Director and CEO Ashu Suyash said: “The higher net worth requirement will encourage CRAs to invest in intellectual capital and build quality infrastructure, thereby paving the way for a world-class industry. The guidelines around threshold for promoter holdings for a minimum period of three years will ensure greater commitment from promoters setting up CRAs.”
Besides, Sebi eased the access norms for investment by Foreign Portfolio Investors (FPIs) and warned against “insider trading” .
In addition, the regulator issued norms on shareholding, governance of mutual funds and allowed listing of security receipts issued by Asset Reconstruction Companies.
—IANS
by admin | May 25, 2021 | Corporate, Corporate Buzz, Economy, Markets, News
New Delhi : Stock exchange major BSE on Friday said its wholly-owned subsidiary India International Exchange (India INX) has received approval from the securities market regulator Securities and Exchange Board of India (Sebi) on the framework for listing of debt securities.
According to a BSE statement, with the approval for debt listing, India INX expects a significant increase in its daily trading volumes which currently stood at an average of $100 million every day.
The exchange had approached the regulator in October for its approval on listing of debt securities.
“For the first time in India’s IFSC at GIFT City, Indian and foreign issuers can now issue masala bonds, eurobonds and foreign currency bonds from India INX,” said V. Balasubramaniam, Managing Director and Chief Executive Officer, India INX.
The statement said the India INX will be the first Indian exchange to offer clearing and settlement of debt securities through International Central Securities Depositories.
“Earlier this year, the exchange had set up its clearing and settlement capabilities for international securities through Clearstream and is already in talks with Euroclear,” the statement said.
International issuers too may prefer to list their foreign currency bonds with India INX in time to come, it added.
—IANS
