Indian regulator proposes uniform trading disclosures, higher net-worth for margin trading
- Any exchange commencing a new segment can provide incentives of up to 25% of their net worth in the first five years
MUMBAI: India’s markets regulator on Friday proposed to issue a uniform set of trading-related disclosure requirements to standardise compliance across India’s three stock exchanges and two commodity exchanges.
Securities and Exchange Board of India (SEBI), in addition, recommended increasing the net-worth requirement for stock brokers providing margin trading facility to a minimum 50 million Indian rupees ($554,926.64), up from the existing 30 million rupees.
SEBI also proposed that liquidity enhancement rules, which are financial incentives for brokers to boost trading volumes,currently used for equity and equity derivatives, should be applied to commodity derivatives as well.
The regulator said that such schemes, however, should not create artificial volumes, not take away liquidity from the market and not be manipulative in nature.
Any exchange commencing a new segment can provide incentives of up to 25% of their net worth in the first five years, after which they can offer incentives up to 25% of their profits for the product, SEBI said.
This proposal could benefit India’s National Commodity and Derivatives Exchange (NCDEX), which plans to launch equity offerings this year.
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