SEBI Greenlights MF Lite Framework, T+0 Expansion; Remains Silent on Allegations Against Chief Madhabi Puri Buch

SEBI's recent meeting brought-in some major developments for investors. On Monday, the board approved the introduction of a new asset class for high-risk profile investors. This was primarily aimed at bridging the gap between mutual funds and portfolio management services.

The market watchdog also cleared the proposal for mutual fund lite framework for passive mutual fund schemes. However, investors were taken by a bit of surprise as Sebi did not mention anything related to the growing volume in derivatives trading. The Dalal Street was anticipating some changes around the futures and options segment.

Some of the key proposal brought to the table by the market watchdog included shortening the timeline for rights issues, increasing the total number of scrips in the T+0 settlement cycles and simplifying regulations for MF Lite.

The board approved nearly 17 proposals in total, including changes to insider trading rules to clarify the definitions of terms like 'connected person' and 'immediate relative.'

They also relaxed the eligibility criteria and compliance requirements for investment advisers and research analysts, making it easier for them to operate.

Timing or Coincidence?

The recent proposals to clarify definitions that fall under insider trading come at a time when Sebi Chief Madhabi Puri Buch is facing similar allegations.

While the market regulator introduced and approved multiple proposals, it made no mention of the recent allegations by US-based short seller Hindenburg Research against Buch and her husband, Dhaval Buch.

Post the meeting, Sebi issued a statement announcing plans to introduce "summary proceedings" in its rules to handle certain minor violations by market intermediaries quickly and effectively. It also decided to allow more flexibility when allotting shares to certain investors during rights issues. Also, there was another significant announcement made for the promoters of the companies and their shares.

As per the market regulator, promoters will now be able to transfer their rights to select investors during rights issues, which could attract more investments to the market.