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SEBI extends deadline for direct ETF transactions to May 1, 2023; Cuts face value for Debt Issues to Rs 1 lakh

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SEBI defers deadline for direct ETF transactions yet again

On October 28, 2022, the Securities and Exchange Board of India (SEBI) extended the deadline for implementation of the Rs 25 crore-threshold rule for direct ETF (exchange-traded fund) transactions with asset management companies (AMCs) to May 1, 2023. This means the clause 2(IV)(A) of the circular issued on July 28,2022 will be applicable from May 1, 2023.

  • Initially, the rule was to come into force from July 1, 2022 and the same was extended till November 1, 2022.
  • This is the 2nd time SEBI has extended this deadline.

This information by SEBI is provided  in exercise of the powers conferred under Section 11 (1) of the SEBI Act 1992, read with the provision of Regulation 77  of  SEBI  (Mutual  Funds)  Regulation,  1996  to  protect  the  interests  of  investors  in securities and to promote the development of the securities market.

What is the rule?

To enhance liquidity in units of ETFs in stock exchange platforms, direct transactions with AMCs will be facilitated for investors only when the transaction amount is greater than Rs 25 crore.

Click Here for Official Notification

SEBI cuts face value for Debt Issues to Rs 1 lakh

SEBI reduced the face value of debt security and non-convertible redeemable preference share issued on private placement basis to Rs 1 lakh from the current Rs 10 lakh w.e.f. January 1, 2023.

  • The issuer will have the option while raising funds through tranche placement memorandum to keep the face value at Rs 10 lakh or Rs 1 lakh.

Reason behind this move:

To enhance liquidity in the corporate bond market

This information by SEBI is provided  in exercise  of  the  powers  conferred  under  Section  11(1)  of  the SEBI Act, 1992 read with Regulation 55 (1) of the SEBI (Issue and Listing of Non-convertible Securities) Regulations, 2021.

SEBI to develop world’s 1st system for Securing Stock Exchanges from Cyberattacks

SEBI is all set to develop a system to mitigate risk of cyber attacks in collaboration with the BSE (formerly Bombay Stock Exchange) and the National Stock Exchange (NSE). The system will be operational from March 2023. India will be first in the world to set up this technology.

  • This information was provided by the SEBI Chairperson Madhabi Puri Buch in her lecture on ‘Data and Technology in the Capital Market’ at the Indian Institute of Management (IIM) Bengaluru, Karnataka.

Key Points:

i.Under the proposed mechanism, all the data of every client’s positions and collateral which is there in exchange ‘A’ is online and going and sitting in a storage box next to exchange ‘B’, in its data centre.

ii.If exchange ‘A’ goes down amid software attack and it’s not going to be possible for DR (Disaster Recovery) site to come up in time, SEBI will press the button for that data to be uploaded into exchange ‘B”s system software.

iii.This will enable every participant in the market to operate on exchange ‘B’ as was operating on exchange ‘A’.

Recent Related News:

i.The Singapore-based company, Helios Capital Management (India) Private Limited Founder & Fund Manager Samir Arora received capital markets from the Securities and Exchange Board of India (SEBI) to launch the Mutual Fund (MF) business.

ii.BSE Limited(formerly Bombay Stock Exchange) has received final approval from the Securities and Exchange Board of India (SEBI) for introducing the Electronic Gold Receipt (EGR) segment on its platform.

About Securities and Exchange of India (SEBI):

Chairperson– Madhabi Puri Buch
Headquarters– Mumbai, Maharashtra
Establishment– 1992