Regulatory Roundup

Regulatory changes in March 2024, and how they will impact you

Capital Markets

Change: The Securities and Exchange Board of India (Sebi) directs asset management companies (AMCs) to conduct stress tests on small and mid-cap funds and disclose key findings on liquidity and other aspects.

Impact: It will help investors evaluate different AMCs’ liquidity positions. For instance, investors will know how soon they can get their money back if the equity markets collapse and there is a rush to redeem.

Change: Sebi introduces Beta version of the T+0 rolling settlement cycle on an optional basis in addition to the existing T+1 cycle in the equity cash markets for 25 scrips.

Impact: It will shorten the settlement cycle, bring efficiency, create transparency, and higher liquidity for investors.

Change: Sebi issues new guidelines to its October 6, 2023 circular for depositories to safeguard investors’ interest on transfer of securities in demat mode and harmonise classification of inactive accounts across exchanges and depositories.

Impact: The new rules are aimed at preventing fraud and misappropriations of inoperative demat accounts.

Insurance

Change: The Insurance Regulatory and Development Authority of India (Irdai) issues fresh guidelines to life insurers on providing customers with the surrender value of policies offered on linked and non-linked platforms.

Impact: The rule aims to bring clarity to life insurers’ policies and computations regarding the surrender value of policies surrendered or discontinued. It does away with the interim proposal to increase the surrender value. It also lays emphasis on selling insurance in a transparent manner so that customers understand what they are getting into.

Change: Irdai introduces  Bima Sugam Insurance Electronic Marketplace Regulations, 2024, as a one-stop solution for all stakeholders, including customers, insurers, intermediaries, and agents.

Impact: The aim is to promote transparency, efficiency, and collaboration across the entire insurance value chain, while universalising insurance and empowering and safeguarding policyholders to achieve insurance for all by 2047.

Change: The new Insurance Products Regulations, 2024, merges  six regulations into one framework to respond to evolving market demands.
Impact: The regulations will promote good product design and pricing and cater to the insurance needs of all segments.

Change: Irdai gives nod to Corporate Governance for Insurers Regulations, 2024, to establish a robust governance framework for insurers, defining the roles and responsibilities of the board and management.

Impact: The regulations will ensure the adoption of sound and prudent governance principles and practices, increasing transparency, accountability, and ethical conduct, thereby enhancing the trust and confidence among stakeholders.

*List is not exhaustive | Compiled by Sanjeeb Baruah