Regulatory Roundup

Capital Markets

Change: The Securities and Exchange Board of India (Sebi) proposes changes to the Basic Services Demat Account (BSDA) rules, such as increasing the limit from Rs 2 lakh to Rs 10 lakh for combined value of securities, one account for depositories, and lower fees.

Impact: It will allow more retail investors to trade while enjoying the benefits of a BSDA account, such as no annual fee for portfolio values up to Rs 4 lakh, and Rs 100 for those between Rs 4 lakh and Rs 10 lakh.

Change: Sebi asks stock brokers to credit securities for payouts directly into clients’ demat accounts and asks clearing corporations to provide a mechanism for trading, and clearing members to identify unpaid and funded stocks under the margin trading facility.

Impact: It will enhance operational efficiency, protect clients’ securities, and ensure that stock brokers segregate securities so they are not vulnerable to misuse. Till now, brokers pooled securities for payouts before crediting them to the clients’ demat accounts.

Change: Sebi asks stock exchanges, depositories, asset management companies, and registrar and transfer agents (RTAs) to amend their bylaws to implement its decision to revoke the freezing of demat accounts and mutual fund folios for not submitting customer nominations. It has, however, asked them to encourage people to provide choice of nomination.

Impact: This decision will allow security holders to receive dividend, interest, and redemption payments, lodge grievances, or avail of any service from an RTA, even without nomination.

Change: Sebi asks intermediaries to continue updating the know-your-customer (KYC) data on the KYC Registration Agencies (KRA) systems. Then, KRAs must upload the details on the Central KYC Records Registry within seven days and complete the process in six months starting August 1, 2024.

Impact: It will ensure the latest verified information is in official records, ensure  safe transactions and reduce KYC-related issues.

Pension

Change: The Pension Fund Regulatory and Development Authority (PFRDA) will provide details of new functions introduced in the National Pension System (NPS) and the Atal Pension Yojana (APY) by the central recordkeeping agencies (CRAs) in the last two quarters of FY 2023-24.

Impact: It will allow NPS and APY members to check all the changes introduced in one place and take advantage of the benefits offered, such as withdrawal module, penny drop verification, payment receipt download facility, and CRA portability, among others.

Insurance

Change: The Insurance Regulatory Development Authority of India (Irdai) has instructed insurers to engage surveyors, loss adjustors and investigators, and appoint district claims service heads in the aftermath of Cyclone Remal in West Bengal and the north eastern states.

Impact: It will facilitate mobilisation of resources for quick settlement of claims and financial relief to people affected by the cyclone.

Change: Irdai issues master circulars related to life and general insurance businesses as reckoners for various customer-centric policy features and governance measures.

Impact: It will allow customers to find all relevant information concerning products and regulations, such as add-ons, customer information sheet, no-claims, claims settlement, pricing, benefit illustration, riders, free look period, nomination, grace period and splitting of policies, etc., at a single place, and ensure insurers’ ease of operations.

Banking

Change: The Reserve Bank of India (RBI) plans to establish a digital payment intelligence platform to combat cyber crimes, mainly online debt and credit card fraud.

Impact: The platform will share real-time data and intelligence across the digital payments ecosystem to prevent payment fraud risks and boost the safety of digital public infrastructure. These steps are expected to raise consumer awareness and confidence.

*List is not exhaustive | Compiled by Sanjeeb Baruah