RBI & Sebi to Take a Fi­nal Call on FPIs’HDFCBankTradesTo­day

The Economic Times - - Money - Reena Zachariah & Ra­jesh Mas­caren­has

by for­eign port­fo­lio in­vestors led to a breach of their max­i­mum limit in HDFC Bank on Fri­day

Mumbai: The Re­serve Bank of In­dia and the Se­cu­ri­ties and Ex­change Board of In­dia (Sebi) will take a fi­nal call on the pur­chases in HDFC Bank done by for­eign­ers af­ter 1:39 PM on Fri­day once the set­tle­ment of trades is done on Wed­nes­day. Fren­zied pur­chases by for­eign port­fo­lio in­vestors had led to a breach of their max­i­mum pur­chase limit in HDFC Bank on Fri­day af­ter the Cen­tral bank, the pre­vi­ous evening, lifted curbs on fresh buy­ing by over­seas in­vestors in the pri­vate lender with their stake drop­ping be­low the pre­scribed limit.

Though the RBI clamped down on for­eign pur­chas­esmid-waythrough­thetrad­ing­day, many trades had al­ready been ex­e­cuted, prompt­ing the Cen­tral bank to ask all cus­to­di­ans not to set­tle trades in HDFC Bank done af­ter 1.39 PM on Fri­day in which for­eign­ers were buy­ers.

The reg­u­la­tors said they would get an ex­act pic­ture of FPI trans­ac­tions in HDFC Bank that hap­pened af­ter 1:39 PM on Fri­day.

“We will come to know once the set­tle­ment is done on Wed­nes­day and will re­solve the is­sue,” said a reg­u­la­tory of­fi­cial.

Sebi on Mon­day asked cus­to­di­ans — for­eign banks — to pro­vide de­tails of the num­ber of trades and shares in­volved in the HDFC Bank stock af­ter RBI no­ti­fi­ca­tion time and the num­ber of trades in­volved af­ter the stock ex­change no­ti­fi­ca­tion time on Fe­bru­ary 17.

It is learnt that the RBI no­ti­fi­ca­tion was sent to cus­to­di­ans on Fri­day around 12.56 PM af­ter the reg­u­la­tor no­ticed the FII limit was breached. But, the stock ex­change no­ti­fi­ca­tion came in only by 1.39 PM.

The reg­u­la­tors could put the onus on the bro­kers, who ex­e­cuted the trades, or FPIs to re­solve the mat­ter.

“All cus­to­di­ans have con­firmed trades till 1.39 PM. Any trade af­ter the cut-off time may ei­ther de­volve on the bro­ker or the reg­u­la­tor may give some time to the for­eign port­fo­lio in­vestor (FPIs) to bring down their hold­ing,” said a per­son in­volved in the dis­cus­sion with the reg­u­la­tors.

Stock ex­changes said they were yet to re­ceive any di­rec­tion from the reg­u­la­tors on the mat­ter.

“If ex­changes don’t an­nual the trades, then bro­kers will have to take those trades on their books,” said a se­nior stock ex­change of­fi­cial. “Stock ex­changes can an­nul the trades, but so far we have not re­ceived any com­mu­ni­ca­tion from Sebi or the cen­tral bank,” he added.

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