SEBI to review MTF for streamlining risk management at clearing corporations
SEBI to review MTF for streamlining risk management at clearing corporations
Considers changes to the regulatory framework for angel funds
In its annual report for 2024-25, the Securities and Exchange Board of India (SEBI) has said that a "comprehensive review exercise is being undertaken on the currently applicable margining framework." Also, a review of margin trading funding (MTF) and the scrips eligible under it is being considered.
(In margin trading, investors buy shares without having the full amount. They can purchase shares by paying only part of the price, while the rest is covered through a margin deposited in cash or as shares kept as collateral).
The market regulator is also contemplating changes to the regulatory framework for angel funds. The review will focus on fundraising processes, investment conditions, and operational aspects to facilitate ease of doing business and streamlining regulatory requirements.
(Angel funds play a pivotal role in channelising the capital of angel investors to startups in need of funding).
SEBI has further proposed to review the classification of REITs and InvITs as hybrid instruments.
The move follows representations from various stakeholders, the presence of equity-like features in these instruments, the development of the market ecosystem over the last decade and global practices.
A review of the regulatory framework for Mutual Funds (MFs) is also on the cards. It will ensure, the regulations are effective, adaptable, and aligned with the evolving market landscape.
Currently, it is scrutinising the restrictions for Asset Management Companies (AMCs), after receiving feedback from the MF industry, including the Association of Mutual Funds of India (AMFI).
It intends to expand the range of permissible investment strategies under Specialised Investment Funds (SIFs). Currently, SIFs allow AMCs to offer a limited set of strategies across equity, debt, and hybrid categories.
It was introduced to bridge the gap between MFs and Portfolio Management Services (PMS) for flexibility. The SIF framework requires investors to commit at least Rs.10 lakh across all strategies.
