Capital Markets
Deadline Extension
Sebi streamlines the investor accreditation process and proposes fast-track debt issuance. Read on to know all moves taken by PFRDA and RBI in the last month
Deadline Extension
Change: Securities and Exchange Board of India (Sebi) on December 27, 2023, extended the deadline for adding or opting out nominees in demat accounts and submitting PAN and KYC details for physical securities until June 30, 2024.
Impact: It provides more time for compliance, and thus ensures a smoother transfer of proceeds to legal heirs or beneficiaries. Unless complied with, this will lead to the freezing of folios.
Change: Sebi streamlined requirements for accredited investors and accreditation procedures, giving accreditation agencies easy access to KYC data. It also extended the validity of accreditation certificates.
Impact: Facilitates easier accreditation, and enhances process efficiency. It will help companies seeking capital offer securities to more AIs through private placements.
Change: Sebi explores reducing the SIP minimum amount to Rs 250, enabling wider participation and accessibility into mutual funds. “We are working with the mutual fund industry to see where is the cost, and what can Sebi to bring that viability down to Rs 250 a month, because then it is the equivalent of what Hindustan Lever did with shampoo sachets. You just explode the market,” Sebi's chairperson said at an event.
Impact: The move will potentially boost mutual fund accessibility, and improve financial inclusion by encouraging smaller investments.
Change: Sebi proposed 'fast track' public issuance for debt securities through a consultation paper, also considering a reduction in face value for private placement debt securities to Rs 10,000 from Rs 1 lakh, aiming to ease business processes.
Impact: The move will help in frequent issuance for reputable debt issuers, reducing time, cost, and effort, and promoting bond market efficiency.
Fund Transfer Enhancement
Change: Pension Fund Regulatory and Development Authority (PFRDA) on December 6, 2023, introduces QR-based Direct Remittance (D-Remit) via UPI for fast fund transfers from a National Pension System subscriber's bank account to trustee's bank account.
Impact: Increase convenience and pace of fund transfers. The move will also allow the members to receive the Net Asset Value (NAV) the same day, provided the trustee bank receives their NPS contributions by 9:30 am.
Change: PFRDA allowed NPS subscribers the option to select separate pension managers for three asset classes, namely equity, government security and corporate bonds. Subscribers can change asset allocation four times in a financial year. To use this facility, subscribers will have to opt for active choice for asset allocation and not auto mode.
Impact: The move empowered subscribers with more choice in asset management options. Also, this can help them choose personalised investment strategies for more returns.
Forex Correspondent Model
Change: RBI proposed a new category of money changers, called Forex Correspondents (FxCs) of authorised dealers, for conducting forex business through an agency model.
Impact: The move provides more avenues for forex transactions, and broadens the scope for businesses and individuals engaging in foreign exchange activities.
Change: RBI increased UPI transaction limits for payments to hospitals and educational institutions to Rs 5 lakh from the current Rs 1 lakh. The central bank also raised e-mandate limits without Additional Factor of Authentication (AFA) in recurring transactions to Rs 1 lakh. The limit increase applies to mutual fund subscriptions (SIP payments), payment of insurance premiums and credit card bill payments.
Impact: The move broadens UPI usage in crucial sectors, and streamlines e-mandate options for higher-value transactions