Sebi to boost cash shorts, untangle promoter tag

Regulator may blink on brokerage fee cap for MFs

- ASIT RANJAN MISHRA & VIKAS DHOOT

India’s stock market regulator is gearing up to consider a complete overhaul of regulations governing stock brokers and mutual funds — formulated in the 1990s — at its December 17 board meeting, even as it looks to walk back on a plan to slash the cap on brokerage fees for mutual funds as it could have a chilling effect on independent equity research.

While the new regulations for mutual funds and stock brokers are likely to focus on easing compliance and slashing redundant norms, the Securities and Exchange Board of India (Sebi) is also eyeing measures to bolster market activity in the cash segment amid a resurgence in futures and options (F&O) trading volumes, through reforms aimed at spurring short selling activity in the cash market.

Separately, it is reviewing the listing and disclosure norms for public firms in a bid to iron out emerging “ambiguities” in defining or identifying firms’ promoters, especially in new age companies, and ensuring that promoters don’t hang on to the tag even after losing control of a firm, a senior official aware of the development told Business Standard.