In a significant move aimed at enhancing the financial market’s integrity, the Securities and Exchange Board of India (SEBI) has issued a pivotal circular on December 12, 2023. This directive mandates that Stock Brokers (SBs) and Clearing Members (CMs) must transfer clients’ funds to Clearing Corporations (CCs) by the end of each business day. This transfer can be facilitated through cash, liens on Fixed Deposit Receipts, or by pledging units of Mutual Fund Overnight Schemes (MFOS).

New Cut-off Timings for Fund Transfers

To improve the efficiency of this new requirement, SEBI has proposed adjustments to the cut-off timings for determining the applicable Net Asset Values (NAVs) for repurchasing units in overnight schemes. Starting from June 1, 2025, the revised cut-off timings are as follows:

• Applications submitted by 3 PM will utilize the closing NAV from the day before the next business day.
• Applications submitted after 3 PM will rely on the closing NAV of the next business day.
• For online applications, the cut-off extends to 7 PM.

These changes are designed to streamline the processing of transactions and enhance the safeguarding of clients’ investments.

Enhancing Compliance for Designated Persons

In another noteworthy development, SEBI has expanded the automated trading window closure to include immediate relatives of Designated Persons (DPs) in publicly listed companies. This initiative will be effective during the period from the end of each financial quarter until 48 hours post the announcement of financial results.

This framework aims to bolster compliance with Prohibition of Insider Trading (PIT) regulations by freezing the Permanent Account Number (PAN) of DPs at the security level. The phased roll-out will begin on July 1, 2025, for the top 500 companies and will extend to others starting October 1, 2025. This proactive measure is expected to enhance market surveillance and investor protection.

New Investment Opportunities from AMCs

On the investment front, several Asset Management Companies (AMCs) such as Nippon AMC, SBI AMC, and Bajaj AMC have unveiled a variety of New Fund Offerings (NFOs). These new offerings provide investors with a broad spectrum of investment choices:

• Nippon India Nifty 500 Quality 50 Index Growth Direct Plan and Nippon India Nifty 500 Low Volatility 50 Index Growth Direct Plan cater to different risk profiles by focusing on various Nifty 500 indices.
• SBI AMC has introduced the SBI Income Plus Arbitrage Active FoF Growth Direct Plan, which aims for a balanced investment strategy.
• Bajaj Finserv offers both the Nifty Next 50 Index and Nifty 50 Index Growth Direct Plans, appealing to those looking for exposure to broader market indices.
• Groww AMC has launched the Gilt Growth Direct Plan, emphasizing government securities.
• Motilal Oswal presents the Infrastructure Growth Direct Plan, targeting growth in the infrastructure sector.
• Edelweiss AMC has rolled out the BSE Internet Economy Index Growth Direct Plan, aimed at investors interested in the digital economy.

These diverse NFOs present an excellent opportunity for investors to diversify their portfolios and target specific market segments effectively.

By embracing these changes and new investment options, investors can navigate the evolving landscape of the Indian financial market with greater confidence and security.