Sebi sharpens conflict rules, eases FPI trade settlements

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"We are trying to be as transparent as possible," Sebi chairman Tuhin Kanta Pandey said at a press conference.

(REUTERS)

“Introduction of a digital system to monitor declarations, conflicts and recusals can make the system more transparent. It needs to be seen how Sebi will leverage technology to implement the principles in practice,” said Sidharth Kumar, senior associate at BTG Advaya, a disputes and transactional law firm.

“Additionally, operational guidelines on the oversight committee needs to be crafted carefully to ensure the independence of the regulator,” he added.

The Sebi board said FPIs can settle their trades on a net basis in the cash market. Currently, FPIs settle their trades with the custodian on a gross basis. The move is expected to reduce costs for FPIs, especially on index rebalancing day. Non-outright transactions will continue to be settled on a gross basis. Norms on netting of trades will be implemented on or before 31 December 2026.