Regulations

Collectibles of Consultation Papers

Following is the collection various Consultation Papers of Indian Securities Market. The Consultation Papers may be downloaded from the link provided.

Regulations

Report on market monitoring and surveillance for commodity exchange

Market Surveillance is monitoring of market functioning and trades on Real time basis. The surveillance system is able to detect a wide range of possible market misconduct situations on real-time basis. The exchange monitors trading to prevent manipulation, price distortion and disruptions of trading. The report suggested changes in following areas for improvements in market surveillance and monitoring: • Floor trading practices • Strengthening of the executive teams • Board structures • Prevention of price manipulation • The creation of continuous liquid markets • Introduction of openly transparent markets

Regulations

Report for the Strategy for the Development of Warehouse Receipt System for Agriculture in India

As part of the World Bank Programme aimed at the improvement of the commodity futures exchange in India, Forward Market Commission, Government of India and the World Bank assigned consultancy to: • Assess the feasibility of the warehouse receipt system in the commodities markets with specific emphasis on edible oilseeds, oils and oil cakes, cotton and gur • Promote the warehouse receipt system • Formulate a detailed and phased action plan for implementation The major conclusions of the report are: • The success of the "organized" warehouse receipt system in India requires the elimination of all obstacles in the agricultural sector, as partial elimination may lead to failure and the mistaken belief that warehouse receipts are unsuitable for the country. • Existing government warehousing corporations should take a leading role in developing warehousing, but private operators, especially those already providing storage services, should also be allowed to participate. • Additionally, divestment should be pursued to enhance the private sector orientation and autonomy of these corporations.

Markets

Legal Entity Identifier for all Non-Individual FPIs

In order to improve the quality and accuracy of financial data systems, all non-individual FPIs were mandated to provide their Legal Entity Identifier (LEI) details in the Common Application Form (CAF). Further, FPIs were also mandated to ensure that their LEI is active at all times. Accounts of FPIs with expired/lapsed LEI codes were blocked for further purchases in the securities market till the time their LEI code is renewed.

Markets

Disclosure based Framework for FPIs

Certain FPIs have been observed to hold a concentrated portion of their equity investments in single Indian companies or corporate groups, raising concerns about regulatory circumvention. Identifying beneficial owners of FPIs remains difficult due to fragmented ownership. New SEBI regulations mandate detailed disclosures on persons having any ownership, economic interest, or control in FPIs with significant Indian equity holdings to ensure market stability and transparency.

Markets

Recognition to ‘Stock Exchange’ as a Body for Administration and Supervision of Research Analysts and Investment Advisers

For the purpose of ease in administration and supervision of Research Analysts (RAs) and Investment Advisers (IAs), stock exchange was recognised as Research Analyst Administration and Supervisory Body (RAASB) and Investment Adviser Administration and Supervisory Body (IAASB).

Regulations

Committee on “Strengthening Governance of Market Infrastructure Institutions”

SEBI had constituted a committee on “Strengthening Governance of Market Infrastructure Institutions” in April 2022, under the chairmanship of Shri G. Mahalingam, former WTM, SEBI, to review the existing governance framework and make recommendations for further strengthening of governance norms at MIIs. Key suggestions included: • measures for strengthening the role played by the governing board and committees of MIIs, • reviewing the requirements related to appointment and role and responsibility of directors on the board and Key Managerial Personnel (KMPs) and developing effective metrics for monitoring various aspects of their functioning, and • reviewing the policy on safekeeping and sharing of information held by MIIs, revisiting the code of conduct and code of ethics for directors of the governing board and KMPs and activities and governance of investee companies of MIIs. Based on the recommendations of the Committee and public comments on the same, SEBI approved various amendments to the SECC Regulations, 2018 and D&P Regulations, 2018 for strengthening governance norms relating to MIIs.

Markets

Revised comprehensive framework on offer for sale of shares through stock exchange mechanism

In order to enhance efficiency, ease of compliance and reduce cost based on deliberations in the Secondary Market Advisory Committee of SEBI and discussions with stock exchanges and clearing corporations, it has been decided that the promoters can also offer the shares to employees in OFS through the stock exchange mechanism, subject to certain conditions.

Markets

Introduction of a mechanism for offer for sale by promoters through the stock exchange

In order to enhance efficiency, ease of compliance and reduce cost based on deliberations in the Secondary Market Advisory Committee of SEBI and discussions with stock exchanges and clearing corporations, it has been decided that the promoters can also offer the shares to employees in OFS through the stock exchange mechanism, subject to certain conditions.

Markets

Participation of SEBI registered Foreign Portfolio Investors in Exchange Traded Commodity Derivatives in India

In order to enhance the liquidity, depth for efficient price discovery and price risk management in commodity derivatives segment, various committees including those constituted by the Government of India have recommended participation of institutional investors in the commodity derivatives markets. Taking cognizance of the fact that participation by Institutional investors and based on the recommendation of the Commodity Derivatives Advisory Committee (CDAC), SEBI allowed Category III Alternative Investment Funds, Mutual Funds and Portfolio Management Services were permitted to participate in ETCDs with certain conditions prescribed vide Circular dated June 21, 2017. The sub-group of CDAC recommended opening of ETCDs to other institutional investors in a phased manner. In phase I, Category III Alternative Investment Fund (AIF), Portfolio Management Services (PMS), Mutual Funds, Direct participation of foreign participants having exposure to commodities were allowed and in Phase II, Banks, Insurance/reinsurance companies, Foreign Portfolio Investors (FPIs), Pension Funds were permitted. While, Category III AIFs were already permitted, the participation by Mutual funds, FPIs were permitted subsequently vide circular dated April 26,2019 and September 29, 2022, respectively.