Pranav Mathur, Pune
The Securities and Exchange Board of India has announced a slew of decisions after their meeting that ended on Monday. These changes focus on the rules governing the primary and secondary market in addition to mutual funds and FPIs. Although there were changes and decisions made, the board kept to themselves about any decisions and comments in relation to chairperson Madhabi Puri Buch. Any comments related to the derivatives segment were also kept on the low, which was being eagerly waited for in the market.
This meeting, along with the changes, is significant as this is the first board meeting of the capital market watchdogs after the chairperson had been on the receiving end of severe allegations with Hidenburg making serious allegations against Buch on August 10, soon after which the Congress spokesperson Pawan Khera put up a few charges against her. Khera also alleged that Buch had been receiving income from ICICI bank when she was the capital markets regulator chief, creating a conflict of interest.
The board was also quiet about any decisions in relation to the F&Os even as it was highly expected to take a stern decision on making the index derivatives framework much stronger. Although the decision was not made in the meeting on Monday, the board assured the market that a draft circular talking about tighter derivative regulations will be issued “very soon”.
Once the new framework comes into picture fully, it is expected to have a long significant effect on the securities market, which would eventually put a stop to trading behaviours that resort to gambling like techniques, which had become prevalent with daily expiries of index-derivative contracts. Since the finance minister Nirmala Sitharaman and Buch have both expressed the urgency to take action on the trading behaviours that have become prevalent in the F&Os and the futures and options segment, and the deadline for the public disclosure was August 20, it was highly expected that the SEBI board would finally arrive at a decision and create a framework for the same in the meeting.