SEBI permits PE funds to sponsor mutual fund schemes and set up AMCs

MUMBAI: Capital markets regulator Securities and Exchange Board of India (SEBI) has allowed private equity funds to sponsor mutual fund schemes and set up self-sponsored asset management companies (AMCs). Investors can apply for secondary market trading supported by block amounts. That means the facility like ASBA has been approved by SEBI. Of course, for secondary markets brokers and investors like ASBA will be optional. The above important decisions were taken in the board meeting of SEBI held today.

SEBI has also allowed upstreaming of client funds to clearing corporations at the end of each day to enhance the security of retail investors' funds held with share brokers and clearing members. These measures are expected to reduce fund-related risk by mandating daily upstreaming of funds from all investors, from stock brokers and clearing members to clearing corporations. Investor funds (ie unused cash collateral) in excess of the exchange margin requirement will now be placed in very low-risk and liquid overnight money market instruments by clearing corporations. The proposal will provide investors with independent daily confirmation around their daily fund position within the securities market ecosystem.

In secondary markets like ASBA, the facility will be available through UPI, Sebi said after its board meeting held today.

This facility will be optional for investors as well as share brokers. Under this new structure, settlements will be made directly with the clearing corporation without passing the funds through intermediaries ie bridge accounts of intermediaries.

Meanwhile, SEBI has also approved setting up of Corporate Debt Market Development Fund in the form of Alternative Investment Fund as a backstop facility to buy investment grade corporate debt securities in times of stress. This is expected to increase investor confidence in the corporate bond market and increase liquidity in the secondary market.

Corporate Debt Market Development Fund under guarantee by National Credit Guarantee Trust Company (NCGTC) will be able to raise funds to buy corporate debt securities during market volatility. Sebi has also approved changes in mutual fund norms, further clarifying the roles and responsibilities of trustees and boards of asset management companies.

Top 100 companies required to accept or deny market rumors from Oct. 1

Capital markets regulator SEBI has decided to make it mandatory for the top 100 listed companies to disclose whether they accept or deny market rumors that affect their share prices from October 1, 2023. SEBI has decided to introduce this new provision to bring more transparency and ensure timely disclosures of an incident.

This provision will be implemented from 1st October 2023 for the top 100 companies by market capitalization and from 1st April 2024 for the top 250 companies. SEBI will also have to disclose to the exchanges within 30 minutes the meeting or disclosure arising from the board meeting of the companies. Sebi has said that.