SEBI Current Affairs - 2019

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Liquid Index ETFs shall be eligible for trading in the SLB segment: SEBI

As part of changes in the securities lending and borrowing framework, SEBI has permitted ETFs (Exchange Traded Funds) that track indices to trade in the short selling market. Liquid Index ETFs shall be eligible for trading in the Securities Lending and Borrowing (SLB) segment.

SEBI has also said that an Index ETF would be considered ‘liquid’, if:

  • The Index ETF has traded on at least 80% of the days over the past 6 months.
  • Index ETF’s impact cost over the past 6 months is less than or equal to 1%.

SEBI has also introduced roll-over facility for lenders and borrowers in the SLB segment

This concerns with the short selling in the market. In general, short selling pertains to selling of a stock that is not owned by the seller at the trading time. The short selling can be done by retail and institutional investors.

As per SEBI, any lender or borrower who wants to extend an existing lent or borrow position shall be permitted to roll-over such positions. Thus, now a lender who is due to receive securities in the pay out of an SLB session can extend the period of lending. Likewise, a borrower can extend the period of borrowing.

  • The roll-over shall be conducted as part of the SLB session.
  • Rollover would not be permitted for netting of counter positions.
  • Rollover shall be available for a period of three months i.e. the original contract plus two rollover contracts.

Sebi has asked stock exchanges to take necessary steps for implementing the circular.

Month: Categories: Business, Economy & BankingReports & Indices


SEBI eases Mutual Fund exposure limit for HFCs

SEBI eased the the investment limit for HFCs (Housing Finance Companies) in debt mutual funds. An additional exposure not exceeding 10% of net assets of the scheme shall be allowed only to HFCs as part of financial services sector for prudential limits in debt oriented schemes.

The relaxation would be subject to certain conditions such as:

  • The securities issued by HFCs are rated ‘AA’ or above
  • The HFCs should have been registered with the National Housing Bank (NHB)
  • The total investment in HFCs shall not exceed 30% of the net assets of the scheme

Month: Categories: Business, Economy & Banking