Position Limits For Brokers, IPO Pre-Open Session And Exchange Governance On SEBI Panel’s Aug 19 Agenda

Market regulator Securities and Exchange Board of India’s Secondary Market Advisory Committee (SMAC) is meeting today, August 19, to consider a set of critical reforms. These are aimed at building up the governance of market infrastructure institutions and refining rules for investors, people in the know told NDTV Profit.

Among the major issues on the agenda is a review of position limits for brokers in the equity derivatives segment, along with the introduction of new intraday position limits for equity index derivatives.

People aware of the discussions said governance reforms for exchanges and depositories will be a central theme at the meeting. Proposals include appointing two independent executive directors as heads of separate business verticals who would also sit on the governing boards of MIIs.

Clear roles are also being proposed for executive directors and other key officials, including those heading compliance, risk, technology and cybersecurity functions.

The committee is also examining a proposal to allow interest earned on Investor Protection Fund (IPF) investments to be used for compensating dedicated IPF staff. Alongside this, SEBI is considering the merger of Investor Protection Funds of stock exchanges and commodity derivatives exchanges into a single consolidated pool.

Another reform under discussion is the review of the Special Pre-Open Session (SPOS) mechanism for IPOs and relisted shares. The move is aimed at addressing concerns over price discovery and volatility during the initial stages of trading.

Investor convenience is also on the table, with a plan to introduce a systemic withdrawal and transfer facility for mutual fund investors holding units in demat form. The facility is expected to simplify processes for investors and provide more flexibility in managing their holdings.

Separately, the committee will review the framework for performance-linked pay of top officials at MIIs such as exchanges, clearing corporations and depositories, with an emphasis on linking variable pay to accountability and governance standards.