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The Securities and Exchange Board of India (SEBI) is set to hold its board meeting, a gathering that promises to be significant due to the pressing issues on its agenda. Key topics include the introduction of tighter regulations for Futures & Options (F&O) trading, the launch of a 'New Asset Class' catering to high-net-worth individuals, and the streamlining of mutual fund lite regulations. This meeting comes at a particularly sensitive time, following allegations from Hindenburg Research against SEBI Chairperson Madhabi Puri Buch and the recent protest by SEBI employees demanding changes in senior leadership.
The proposed tighter norms for F&O trading are a reflection of the government's concern regarding high levels of speculative activity in this market. SEBI had previously proposed measures such as restricting multiple option contract expiries, increasing the size of option contracts, and introducing intraday monitoring of position limits. The board meeting will likely see further discussions on these proposals and potential implementation plans.
The introduction of the 'New Asset Class' is a major initiative aimed at expanding investment options for wealthy individuals. This new category will offer investment products that bridge the gap between mutual funds and portfolio management services (PMS), with a minimum investment limit of Rs 10 lakh. This could potentially lead to increased participation in the financial market and attract a greater pool of investments.
SEBI is also expected to address the issue of mutual fund lite regulations. This initiative aims to simplify compliance requirements for passively managed mutual fund schemes, making it easier for retail investors to diversify their portfolios at lower costs. This move could potentially boost participation in the mutual fund market and enhance financial inclusion.
Adding further complexity to the agenda are the allegations leveled by Hindenburg Research against SEBI Chairperson Madhabi Puri Buch. The US short seller accused Buch of having investments in offshore funds linked to the Adani Group. While SEBI has already conducted a probe and cleared the Adani Group of wrongdoing, the board meeting will likely address these accusations and their potential impact on the regulator's credibility. The employees' protest, highlighting concerns about a 'toxic work culture' and demanding changes in leadership, will also be a key topic for discussion. The protest, fueled by alleged instances of harsh language and unrealistic targets set by senior management, will likely lead to internal investigations and potential changes in management practices.
The SEBI board meeting is expected to be a significant event for the Indian financial landscape. The decisions made regarding the proposed regulations and the responses to the allegations against SEBI will have far-reaching implications for the market's future. The outcome of this meeting will be closely watched by investors, market analysts, and the public alike.
Source: SEBI board meeting: SEBI holds board meeting today; Here’s what’s on agenda?