Regulatory Roundup

Capital Markets

Change: The Securities and Exchange Board of India (Sebi) has introduced a framework requiring market infrastructure institutions (MIIs) like exchanges and broking houses to disclose ownership patterns every quarter under its Listing Obligations and Disclosure Requirements (LODR) rule.

Impact: Effective January 12, 2025, the framework aims to boost compliance with the ownership restrictions and public shareholding requirements, ensuring transparency and giving stakeholders information about shareholding.

Change: Sebi has unveiled a new voluntary “put option” for investors to sell bonds back to the issuers on specific dates at up to 100 basis point discount.

Impact: Effective from November 1, 2024, this facility aims to enhance the liquidity of corporate bonds and boost the confidence of retail investors and growth-stage issuers.

Change: Sebi has reduced the time from 317 to 23 working days for corporations to file a Draft Letter of Offer to conduct rights issues. It has also launched Mutual Fund Lite framework for passivly managed schemes, such as exchange-traded funds (ETFs) and index funds.

Impact: These changes in rights issues will enable the shareholders to buy more shares at a set price, and promoters will be able to renounce rights entitlements to investors, thereby ensuring shares are effectively allocated. The Mutual Fund Lite framework aims to improve market efficiency and investments.

Change: Sebi has brought mutual funds (MFs) under the Prohibition of Insider Trading Regulations, 2015.

Impact: This change, effective November 1, 2024, will mandate MFs, trustees, employees, and directors to comply with insider trading regulations, such as disclosing MF holdings quarterly and barring them from selling MFs if they have privileged information.

Banking

Change: The Reserve Bank of India (RBI) has updated the list of unauthorised forex trading platforms to 88.

Impact: The list warns investors of increasing risks and fraudulent activities on websites and platforms that contravene RBI regulations.

Change: RBI has issued guidelines related to the finance ministry’s “Accessibility Standards and Recommendations” to banks and other financial institutions for ease of access to digital payment systems by specially-abled people.

Impact: They will have to guarantee that their systems can accommodate all users.

Change: RBI has introduced a “beneficiary account name lookup” facility for real-time gross settlement (RTGS) and national electronic fund transfer (NEFT).

Impact: It will help mitigate fraud and credit to wrong accounts, as remitters can verify the beneficiary’s name before a transaction.

Change: RBI has changed the limit for UPI1234Pay from `5,000 to `10,000 and UPI Lite wallet from `2,000 to `5,000 and transaction limit from `500 to `1,000.

Impact: These will deepen the use of digital payments.

Pension

Change: The Department of Pension and Pensioners’ Welfare has allowed central government employees covered under the National Pension System (NPS) to opt for voluntary retirement after completing 20 years of regular service, by submitting a written notice to the appointing authority at least three months prior.

Impact: Employees will have more flexibility in planning for retirement while retaining benefits from NPS.

Change: The Pension Fund Regulatory and Development Authority (PFRDA) has launched a Balanced Lifecycle Fund for subscribers of the NPS from the private sector.

Impact: The fund will enhance the investment choices under NPS for the All-Citizen Model and corporate subscribers through a mix of equity and debt asset allocations, automatically being rebalanced with age.

*List is not exhaustive | Compiled by Sanjeeb Baruah