Tag: SEBI

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SEBI halts NCDEX, MSE from equity derivatives launch

The Securities and Exchange Board of India (SEBI) has paused plans by the National Commodity and Derivatives Exchange (NCDEX) and the Metropolitan Stock Exchange (MSE) to offer equity derivatives. The move is part of the regulator’s effort to ensure that new exchanges first develop strong and liquid cash equity markets before venturing into derivatives trading.

Both NCDEX and MSE had applied to enter the equity market last year, seeking approval to list shares and launch options and futures contracts. SEBI, however, has told them to focus on building a robust cash market first. Officials indicated that the regulator wants these exchanges to demonstrate sufficient liquidity, price discovery, and trading activity in cash equities before allowing more complex derivatives products.

Both exchanges have been preparing for this expansion. NCDEX raised around ₹770 crore from domestic and foreign investors, aiming to diversify beyond agricultural commodity contracts. MSE secured roughly ₹1,200 crore from private equity and brokerage backers to strengthen its technology platform and infrastructure. Despite these efforts, SEBI wants them to prove their readiness in cash equities first.

The regulator has also emphasized technology upgrades as a prerequisite for derivatives trading, underscoring the importance of market stability and investor protection. This move comes amid increasing caution around derivatives, following recent government steps such as raising Securities Transaction Tax (STT) on futures and options to curb excessive speculation.

Sources say SEBI prefers a gap of at least six months between starting cash trading and offering derivatives. The decision reflects broader concerns in the Indian market, where derivatives trading is already nearly double the size of the underlying cash equity market, a figure much higher than international standards.

SEBI’s directive signals that while new players are welcome, they must first ensure a solid foundation in the cash segment before entering the fast-moving derivatives market. For now, established exchanges like the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) remain the primary platforms for equity and derivatives trading.

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SEBI rules out immediate futures and options curbs

The Securities and Exchange Board of India (SEBI) has said it will not make any immediate changes to the futures and options (F&O) market, despite the recent increase in Securities Transaction Tax (STT) on derivatives. SEBI Chairman Tuhin Kanta Pandey clarified that the regulator is not planning any new restrictions or banning weekly F&O contracts at this time.

The 2026 Union Budget had raised the STT on futures from 0.02% to 0.05% and increased the tax on options premiums to 0.15%. The move was aimed at reducing speculative trading and protecting small investors. Some in the market had expected SEBI to take further action following the hike.

Pandey reassured investors that SEBI prefers a careful and data-driven approach. He specifically said there is no plan to ban weekly expiry F&O contracts, and the current rules will remain in place for now.

Following SEBI’s statement, market sentiment improved. The Nifty Capital Markets index and shares of firms like MCX and Angel One went up, while the broader market also recovered from earlier losses.

SEBI’s position shows its focus on market stability. Instead of acting immediately, the regulator plans to study market trends and consult stakeholders before considering any changes. This approach is aimed at protecting investors while maintaining a healthy derivatives market.

Investors welcomed SEBI’s cautious stance, as it ensures no sudden restrictions will disrupt trading. The regulator appears committed to balancing investor protection with market growth, taking decisions only after thorough review.

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NSE receives SEBI approval for IPO launch

The National Stock Exchange of India (NSE) has finally received approval from the Securities and Exchange Board of India (SEBI) to proceed with its initial public offering (IPO), ending almost ten years of delays. This clearance allows the exchange to submit its draft prospectus and move toward listing, a significant milestone for India’s capital markets.

NSE first filed for an IPO in 2016, but its plans were stalled amid regulatory scrutiny and legal challenges. The exchange faced allegations regarding co-location facilities and dark fibre services, which reportedly gave select brokers faster access to trading data. Over the years, these issues delayed NSE’s path to listing, even as other Indian exchanges, like BSE, successfully went public.

The recent SEBI approval follows settlement applications submitted by NSE to resolve these long-standing cases. Officials from the regulator had indicated that the NOC would likely be granted after these matters were addressed. With the nod now in hand, NSE is expected to submit the IPO draft prospectus by end of March 2026, with the listing process projected to take six to eight months, potentially making NSE a publicly listed company by late 2026.

Unlike conventional IPOs, NSE’s offering is expected to be an offer-for-sale (OFS). Existing shareholders, including LIC, SBI, and other financial institutions, will sell part of their holdings to the public, meaning the exchange itself will not raise fresh capital from the IPO. This approach allows existing investors to realize part of their gains while introducing NSE shares to retail and institutional investors.

NSE chairperson Srinivas Injeti described SEBI’s approval as “a significant milestone in our growth journey,” highlighting the exchange’s commitment to transparency and market development. Market experts say the IPO will not only enhance NSE’s public profile but also boost investor confidence in India’s capital markets.

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SEBI eases tech glitch rules for brokers

The Securities and Exchange Board of India (SEBI) has revised its framework for dealing with technical glitches at stock brokerage firms, giving major relief to small brokers. Under the new rules, the technical glitch framework will now apply only to brokers who have more than 10,000 registered clients. This change effectively removes nearly 60 per cent of brokers from strict reporting and penalty requirements related to technology failures.

SEBI said the move is aimed at reducing the compliance burden on smaller market intermediaries while ensuring that systemically important brokers continue to maintain strong technology safeguards. Smaller brokers had raised concerns that the earlier rules treated all firms alike, regardless of size, scale, or technological capacity.

As per the revised framework, not all technology-related issues will be treated as “technical glitches.” Problems that do not impact actual trading, such as back-office disruptions, issues caused by third-party vendors, or minor interface errors, will no longer attract regulatory action. SEBI clarified that only glitches affecting order placement, execution, or critical trading systems will come under the framework.

The regulator has also relaxed reporting timelines. Brokers will now get up to two hours to report a technical glitch, compared with the earlier one-hour limit. Reporting will also become simpler, with brokers required to use a common reporting platform instead of multiple exchange-specific systems. Brokers must inform stock exchanges as well as their clients within the stipulated time if a serious disruption occurs.

In addition, SEBI has rationalised several technology-related requirements, including capacity planning and disaster recovery drills. These obligations will now be proportionate to the size and client base of the brokerage. Financial penalties for glitches will also be assessed after considering exemptions and the nature of the disruption.

Market participants have welcomed the move, saying it strikes a better balance between market stability and ease of doing business. The revised framework comes into effect immediately and reflects SEBI’s effort to adopt a more practical and risk-based regulatory approach.

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SEBI plans 30‑day delay for stock data use in education

The Securities and Exchange Board of India (SEBI) has proposed a 30‑day delay for sharing and using stock market price data in educational content. The aim is to prevent misuse of live market prices while still allowing investors to learn from recent market trends.

Currently, exchanges and market intermediaries can share data with a one‑day delay, but educational content often uses data that is three months old. SEBI said this difference creates confusion and could let some use near real-time data improperly, which should normally require registration as investment research or advisory.

The new proposal would standardize the delay to 30 days for both sharing and using data. SEBI said this is enough to protect sensitive market information while keeping educational material meaningful. Existing rules on prohibited activities will still apply, and entities focused only on education must continue to follow them.

The regulator has opened the proposal for public comments until January 27, 2026, before finalizing the rules. SEBI’s move comes after concerns that some online platforms and educators were misusing live market data under the guise of teaching investors.

By setting a uniform 30‑day delay, SEBI aims to tighten safeguards around stock price data, reduce confusion, and support credible and safe investor education across India.

This proposal is part of SEBI’s broader efforts to balance market transparency with investor protection, making sure educational content is helpful without allowing it to be used as a shortcut to trade on inside or real-time information.

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SEBI clears 8 IPOs, Indira IVF among them

The Securities and Exchange Board of India (SEBI) has approved initial public offering (IPO) plans of eight companies, signalling steady activity in the primary market. The companies that received the regulator’s clearance include Indira IVF, Rays of Belief, RKCPL Ltd, Chartered Speed, Glass Wall Systems (India), Shriram Food Industry, Tempsens Instruments (India), and Jerai Fitness.

SEBI’s approval, referred to as regulatory “observations”, allows these companies to move ahead with their IPO process. They can now update their offer documents, finalise issue details, and plan market launches, depending on investor demand and market conditions.

Among the approved firms, Indira IVF stands out as a well-known fertility care provider with clinics across several Indian cities. The company had earlier withdrawn its IPO papers and later refiled them using the confidential route, which keeps draft documents private until SEBI grants its observations. Rays of Belief, which works in child development and therapy services, also used the confidential filing route and has now received approval.

The remaining companies filed their IPO applications through the regular process. RKCPL Ltd operates in the infrastructure and civil construction space, while Chartered Speed provides passenger transport and mobility services. Glass Wall Systems (India) is engaged in façade and building solutions, supplying products for commercial and residential projects.

Shriram Food Industry is involved in food processing and exports, and Tempsens Instruments (India) manufactures thermal engineering products and specialised cables used in industrial applications. Jerai Fitness, another company on the list, is known for making gym and fitness equipment for both commercial and home use.

The approvals were issued between late December and early January. Once SEBI observations are received, companies usually have a limited period to launch their IPOs, subject to market conditions.

Market participants see these approvals as a positive sign for India’s IPO pipeline. The presence of companies from diverse sectors such as healthcare, infrastructure, manufacturing, fitness, and food processing reflects broad interest in raising funds from public investors. Investors are now expected to closely watch the final offer details and timelines of these upcoming IPOs.

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SEBI to strengthen non‑farm commodity derivatives

The Securities and Exchange Board of India (SEBI) is taking steps to strengthen the country’s non‑agricultural commodity derivatives market. Chairman Tuhin Kanta Pandey said SEBI will soon set up a working group to review how these markets function and suggest improvements. The move is aimed at increasing market depth, participation, and efficiency, while keeping investor protection intact.

The panel will examine key aspects such as margin rules, position limits, settlement processes, and delivery mechanisms. Its goal is to identify ways to make trading smoother and more transparent, helping both businesses and investors manage risk better. Recommendations from the working group will guide SEBI’s future policy changes.

India already has expert committees studying agricultural commodity derivatives, which have been successful in suggesting measures to deepen participation and improve risk management. SEBI plans to apply similar insights to non-farm commodities, where trading has been growing but liquidity remains a challenge.

SEBI is also in talks with the Reserve Bank of India (RBI) and the Insurance Regulatory and Development Authority (IRDAI) to allow banks and insurance companies to trade in these markets. Greater institutional participation is expected to improve liquidity, enhance price discovery, and make hedging more efficient.

Another key focus is addressing GST-related hurdles that currently complicate delivery and settlement of commodities on exchanges. SEBI is working with the central government to resolve these issues, aiming to better connect derivative markets with physical trading.

The regulator’s move comes at a time of rapid growth in India’s commodity derivatives space. SEBI now oversees over 100 notified commodities, with active trading in many contracts. As the market expands, the working group’s recommendations are expected to make trading easier, safer, and more attractive for investors and businesses alike.

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SAT grants interim relief to Avadhut Sathe Trading Academy

The Securities Appellate Tribunal (SAT) has granted interim relief to Avadhut Sathe Trading Academy Private Limited and its promoters, Avadhut Sathe and Gauri Avadhut Sathe, in a case challenging an interim order passed by the Securities and Exchange Board of India (SEBI). The tribunal has allowed the academy to withdraw limited funds for essential expenses and fixed the next hearing for January 9, 2026.

SEBI, in its interim order issued earlier this month, had impounded ₹546 crore and barred the academy and its promoters from accessing the securities market. The market regulator alleged that the academy was effectively providing unregistered investment advisory and research analyst services while presenting itself as a stock market education and training platform. SEBI also directed banks to freeze the accounts of the academy and its promoters.

Challenging the order before SAT, the academy argued that the action was passed without giving it a prior hearing and had severely disrupted its operations. During the hearing, the tribunal considered the academy’s request to release funds to meet routine operational costs, including salaries, rent, and other basic expenses.

SAT allowed the withdrawal of up to ₹2.25 crore from the frozen accounts for one month to meet essential expenses. The tribunal, however, did not accept the academy’s higher request for funds, noting objections raised over expenses such as advertising and large seminar-related costs, which were not considered critical at this stage.

The tribunal has asked SEBI to file its detailed response to the appeal within six weeks. Until the next hearing, the interim directions of SEBI will continue to remain in force, except for the limited relief granted for operational expenses.

SEBI has maintained that its order was based on evidence gathered during investigations, including searches conducted earlier this year. The regulator has claimed that the academy made misleading claims about trading success and engaged in activities that fall under regulated investment advisory services without proper registration.

The case has drawn attention to the regulatory scrutiny of stock market training platforms and the fine line between education and investment advice. The outcome of the January hearing is expected to be closely watched, as it could have wider implications for similar entities operating in the financial education space.

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SEBI makes mutual funds cheaper for investors

The Securities and Exchange Board of India (SEBI) has announced new rules to make mutual funds cheaper and more transparent for investors. These rules will start from 1 April 2026.

One major change is that SEBI has cut the maximum fees mutual funds can pay for buying and selling shares. For regular stock trades, fees will drop from 0.12% to 0.06%, and for derivatives trades, from 0.05% to 0.02%. This will reduce the trading costs that affect investors’ returns.

SEBI is also changing how mutual fund costs are shown. Funds will now display a Base Expense Ratio, which includes main costs like fund management and running the fund. Other charges like taxes and stamp duties will be listed separately. This makes it easier for investors to see what they are paying for.

Another important change is that SEBI has removed the extra 0.05% fee that some funds charged when investors sold their units early. This will further lower hidden costs.

SEBI says these changes are meant to protect investors and make fees clearer, not just reduce them. Experts say the effect on costs will differ between funds, but overall, many investors are likely to benefit.

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SEBI gives a go-ahead to 7 companies for IPO Launch

Capital markets regulator SEBI has cleared the draft IPO papers of seven companies, moving them closer to listing on the stock exchanges.

The firms include Turtlemint Fintech Solutions, Yashoda Healthcare Services, Fusion CX, SFC Environmental Technologies, RSB Retail India, Orient Cables India and Lohia Corp. SEBI issued its observations on their draft prospectuses between December 8 and 12.

Receipt of these observations allows companies to file final offer documents and launch their public issues within the prescribed timeline. Details such as issue size, pricing and exact IPO launch dates will be announced separately by the companies.