The board meeting scheduled by the Securities and Exchange Board of India (SEBI) on Monday, September 30, is crucial regarding decisions about allegations brought by a US-based short seller 'Hindenburg Research' against SEBI chairman Madhabi Puri Buch. As well as employee protests against top management.
In addition to discussing and possibly approving a number of policy measures and issues in the matter of trading in 'Futures and Options' (F&O).
Hindenburg's allegations
Hindenburg, which first accused Adani Group in January 2023 of evading local market regulations by using tax havens, also claimed in August that the SEBI chairperson Buch's prior transactions and investments could be the reason for the sluggish investigation into the conglomerate.
The US-based firm levelled several accusations against Buch, including her husband Dhaval Buch's income from companies she was adjudicating and her own 99 per cent stake in a business 'actively providing advisory and consultancy services till date.'
Following the incident, though, SEBI chief Madhabi Puri Buch and her husband Dhaval Buch refuted the claims, calling them 'incorrect, motivated, and defamatory.'
Futures and options (F&O) market
Stricter trading guidelines for the futures and options (F&O) market segment are among the other important proposals that the regulator's board may discuss.
In its most recent study, SEBI noted that during the previous three years, roughly 93 per cent of retail investors lost money in the derivatives market, totalling Rs 1.8 trillion.
The rules that specify what actions merchant bankers are permitted to undertake and what they are not are likely to be examined by the SEBI board as well. Furthermore, it's likely that the Rs 5 crore to Rs 50 crore net worth requirement for merchant bankers will be increased.
New asset class between MF and PMS
In terms of policy, SEBI may make way for the introduction of the MF Lite framework for passive fund houses as well as a new asset class that aims to close the gap between mutual funds (MFs) and portfolio management services (PMS).
Investors who are willing to take on greater risk will be catered to by the new product category. For such investments, the minimum ticket size will be Rs 10 lakh, which is less than the Rs 50 lakh minimum threshold set forth for PMS.
Regulations for research analyst and investment advisors
Additionally, the board is expected to discuss and approve regulations regarding research analysts (RAs) and investment advisors (IAs).
These regulations are expected to relax the minimum qualification requirements for registration as an IA or RA from a post-graduation to a graduate degree, as well as remove the requirement to pass the base certification every three years.
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