Sebi’s June Regulations
Sebi‘s new guidelines, effective today, encompass various sectors such as listed companies, mutual funds, stocks, and commodity markets. Here’s a breakdown:
1. Listed Companies Rumor Regulation:
– Starting June 1, new regulations mandate the top 100 listed companies (to be expanded to an additional 150 firms by December) to respond to rumors regarding ‘material price’ shifts in shares by confirming, denying, or clarifying them. If a company confirms a rumor within 24 hours, the impact of such news on stock prices will be excluded when computing the volume-weighted average price. Sebi has introduced a new ‘unaffected price’ mechanism for these calculations, applicable for either 60 or 180 days, depending on the transaction stage.
2. Mutual Funds Documentation:
– From June 1, a revised format for Mutual Fund scheme offer documents – Scheme Information Document (SID), Key Information Memorandum (KIM), and Statement of Additional Information (SAI) – released by Sebi in November will be implemented. This aims to streamline preparation for mutual fund houses and enhance readability for investors.
3. Agricultural Commodities Criteria:
– Effective June 1, new criteria stipulate a minimum average daily turnover of underlying futures contracts of Rs 100 crore over the previous twelve months for the launch of options on agricultural and agri-processed commodities futures. The minimum turnover requirement for options launch has been reduced to Rs 100 crore from the earlier Rs 200 crore.
4. Investor Protection Fund for Commodities:
– Guidelines for stock exchanges with a commodity derivatives segment to establish an investor protection fund will take effect, ensuring the fund’s segregation from the exchange’s funds and immunity from liability. Additionally, 1% of the turnover fee levied by exchanges from trading members, or Rs 10 lakhs, whichever is higher in a financial year, will be allocated to the investor protection fund.
5. Dynamic Price Band for Derivatives:
– New norms to enhance the dynamic price band system for stocks in the derivatives segment will be enforced from June 3. These bands will commence at 10% of the previous day’s closing price of the scrip or contract. Moreover, flexing or stretching of price bands will necessitate 50 trades from at least 10 unique client codes and the involvement of three members on each side.
