SEBI allows convergence of stock, commodity exchanges

The Securities and Exchange Board of India (SEBI), on Thursday, gave its nod to the convergence of both equities and commodity-backed stocks on exchanges from October 2018. The decision was taken at a SEBI Board meeting. Chairman Ajay Tyagi said the convergence will help in crosslisting and provide investors with access to various asset classes. The move will allow major players like the BSE and the NSE to introduce commodity-backed financial instruments on their platforms, while the MCX and the NCDEX will be allowed to list equities and equity F&O. The Union Budget 2017-2018 had proposed to further integrate the commodities and securities derivative markets. The integration has been achieved in two phases. "... The Board approved the proposal to remove the restrictions by making suitable amend- ments to Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporation) Regulations, 2012 ("SECC Regulations"). The amendments to the SECC Regulations would be effective from October 1, 2018," the regulator said in a statement. Deepak Jasani, Head, Retail Research, HDFC Securities, told IANS: "The move will allow bourses like the NSE and BSE to launch commodity products on their platforms. This convergence will help an individual to have one account to trade in all asset classes. SEBI is also looking to simplify and rationalise norms for real estate investment trusts (REITs). The SEBI Chairman said that the securities receipts can now be listed and traded on stock exchanges.” The BSE welcomed the SEBI decision. "The BSE believes this decision will help participants in various markets a highly regulated, safer, more transparent trading, clearing and settlement framework when implemented fully," said BSE's MD and CEO Ashishkumar Chauhan.

WhatsApp leak

Meanwhile, in a stern warning to companies for leakage of key financial details, SEBI said all those responsible, including auditors, would face action and the rules would be strengthened if required. Tyagi said it is clear from the case involving the leakage of information on WhatsApp recently that the details were leaked by the companies themselves. A day after SEBI asked Axis Bank to strengthen its systems and conduct an internal probe to fix responsibility, as the initial investigation attributed the leakage to an "inadequacy" of processes at the bank, Tyagi said there are more companies and necessary actions will follow. He also said that the regulator will amend and strengthen the insider trading norms, if required.