SEBI Board Meet: Regulator approves ASBA-like facility for secondary mkt

The Securities and Exchange Board of India (SEBI) has approved a broad framework of Application Supported by Blocked Amount or ASBA-like facility to be available to investors for secondary market trading.

The facility is based on blocking of funds for trading in the secondary market through UPI, SEBI said in a release post its board meeting.

The facility will be optional for investors as well as stock brokers.


The framework aims at giving benefits such as interest on the blocked funds in a client’s savings account till the time the amount is debited.

Under the framework, there will be direct settlement with clearing corporation, without passing through pool accounts of intermediaries, the regulator said.

Debt Market
SEBI has also approved setting up of a “Corporate Debt Market Development Fund” in the form of an Alternative Investment Fund, to act as a “backstop” facility to purchase investment grade corporate debt securities in times of stress.

This will help instill confidence in investors on the corporate bond market and also enhance secondary market liquidity.

Corporate Debt Market Development Fund (CDMDF), based on a guarantee to be provided by the National Credit Guarantee Trust Company (NCGTC), may raise funds to purchase corporate debt securities during market dislocation.

“Access to the fund for selling securities during market dislocation shall be to specified mutual fund schemes in proportion to the contribution made to the fund at a mutual fund level,” the regulator said.

The regulator has also decided that the period of compliance for Large Corporates to raise 25% of their incremental borrowings through the debt market be extended to a contiguous block of 3 years instead of the current 2 years.

Further, based on the industry feedback, SEBI has decided to extend the ‘comply or explain’ period for High Value Debt Listed Entities (HVDLEs) with respect to corporate governance norms till March 31, 2024.

Mutual Funds
SEBI board has approved amendments to mutual fund regulations such that clarity is provided on the roles and responsibilities of Trustees and board of asset management companies.

The amendment provides for identifying specific areas as core responsibilities of Trustees, and it will require independent evaluation and due diligence by Trustees.

Further, the regulator has approved amendments to make private equity funds as sponsors of mutual funds, which is aimed at giving greater flexibility to the industry and enabling a diverse set of entities to become sponsors of MFs.