In its consultation paper, Sebi proposed to merge multiple overlapping provisions on trading, price bands, circuit breakers, bulk and block deal disclosures, call auction mechanisms, liquidity enhancement schemes, margin trading facility (MTF), unique customer code (UCC), PAN requirements, trading hours and daily price limits into a single, consolidated framework applicable to both equity and commodity segments.Provisions specifically applicable to clearing companies should be bifurcated and subsumed under a special master circular to avoid duplication of regulations, Sebi suggested.
To improve transparency, Sebi proposed to merge the disclosures of bulk and block deals and shift the distribution to the customer PAN level instead of the UCC level, thereby reducing manual reporting requirements for brokers.
The regulator has suggested that market-wide rules for circuit breakers, dynamic price band flexing, IPO price bands and call auction procedures should be presented in tabular form, while several duplicate or outdated operational examples should be removed.
The regulator has also proposed to rationalize MTF norms, including increasing the minimum net worth requirement for brokers from Rs 3 crore to Rs 5 crore or higher, as specified by exchanges. Timelines for filing asset and accounting certificates should be aligned with financial reporting cycles, and redundant due diligence clauses should be removed.
Outdated market definition provisions for the cash segment should be removed and merged into a principles-based Liquidity Enhancement Scheme (LES) framework that now uniformly covers equities, derivatives and commodities.
Under the revised framework, exchanges will have greater flexibility in designing schemes, conducting half-yearly governance reviews and offering incentives, with higher ceilings for new exchanges or new segments, Sebi proposed.
Several outdated provisions, including exemptions for negotiated deals, guidelines for a specific debt segment, futures contracts in commodities, MOU-based trading and unnecessary reporting requirements, have been proposed to be deleted.
Trading hours for all segments, including equities, derivatives, commodities, currencies, RFQ, EGR and the Social Stock Exchange, are consolidated into one section.
The customer code change rules will be liberalized to allow for genuine corrections, enable PAN-linked multiple UCCs for specific customer categories, facilitate easier transfer of liabilities between FPI family accounts, increase the waiver frequency to once a month and discontinue quarterly waiver reporting to Sebi.
Sanctions will also be harmonized between exchanges and clearing houses.
The provisions on short selling and securities lending and borrowing (SLB) will be clarified and included in the main framework, making daily disclosures mandatory and clearly delineating the responsibilities of exchanges and CCs.
Commodity-specific disclosures, such as intent to supply hedgers, open interest data and risk disclosures by listed entities, will also be part of the uniform circular.
The Sebi further proposes to update the provisions on UPI-based trading with blocked amounts in the secondary market, while moving the settlement-related aspects to the CC Master Circular.
Sebi has invited public comments on the proposals till January 30.
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