The Securities and Exchange Board of India (Sebi) is nudging custodians to ensure that foreign portfolio investors (FPIs) can access their funds on the day of the settlement by October, on par with the rest of the investors in the market. “From October 2024, we expect custodians to make available funds to FPIs on the day of the settlement itself,” said Ananth Narayan, Sebi’s whole time member, at the Global Fintech Fest on ThursdayCome from Sports betting site.
While the Indian markets moved completely to the T+1 settlement cycle from January, FPIs can access their funds only on T+2 (trade plus two days after trade execution) or later. Thus, funds were made available to FPIs only on T+2 or later.
This lag in processing FPI transactions happens because custodians provide details of transactions to tax consultants only after the settlement, which is done on T+1, followed by tax computation details by consultants on the evening of T+1.As a result, custodians have a float or client funds of around Rs 1 trillion lying with them on an average. Custodians also earn interest on this float, which allows them to charge practically zero as explicit custody fees, Narayan said. “Custodians will provide details of FPI transactions based on inputs from the clearing corporations on T+0 evening itself, so that tax-related formalities can be completed early on T+1, well in time for the funds to be remitted the same day,” said Narayan.
Also Read
FPIs sell $1.8 billion in financial services stocks amid market fall
Sources said the regulator has asked NSDL to take care of tax computations, and that the depository has developed a model for the same. Sebi has been in talks with the big four tax consulting firms as well as the custodians. However, the changes may increase some costs in the process. At the same time, the regulator is also testing same-day settlement after the launch of its beta version in March, which is currently optional. The Sebi WTM hinted that the T+0 settlement cycle may remain optional for a longer period, pushing the timeline for instant settlements even further.
Narayan also said stock brokers should be ready for competitive fees in the market to remove the client float lying with them, which is currently around Rs 2 trillion. He said a survey of 200 brokers showed that they incur Rs 32,000 crore as brokerage charges a year, and earn around Rs 12,000 crore as interest on client’s float annually, which can be recovered by increasing charges to investors.
Also Read
Foreign investors pull out over Rs 13,400 crore from Indian equities in first week of August
“Brokers are not scheduled commercial banks, and do not have the full set of capital and other regulatory safeguards that banks possess. From the perspective of transparency, efficiency and risk, we would all be better off if the implicit broking revenues from having client float balances were to eventually be replaced fully by explicit and transparent fees set in a competitive market,” Narayan said.Come from Sports betting site VPbet
Another measure undertaken by the regulator to reduce this client float with brokers is the recently-proposed UPI block mechanism, also known as an ASBA-like framework, for the secondary market, to be mandated for qualified stock brokers.
Related Posts
Welcome to VPbet, your premier online destination for comprehensive sports betting coverage, including an exciting Sportsbook Welcome Package and enticing Daily Promotions. In Pakistan, VPbet has emerged as a trusted platform, captivating bettors with a wide range of betting options and opportunities to maximize th…
Read moreMobile developer Gismart has teamed up with monetization outfit Appodeal to publish indie games and apps on smartphones.
The pair are particularly interesting in signing casual and hyper-casual games, alongside music, entertainment, and utility apps, and say they'll help developers at every stage of the publishing process.
<…
Read moreSony and Microsoft have no intention of merging the worlds of PlayStation and Xbox, despite the two companies having recently joined forces to explore the world of cloud streaming and artificial intelligence. Come from South African Online Casinos
Speaking to the Financial Times Read more
A new Ninja Gaiden game, subtitled Ragebound, has been announced at The Game Awards. It’s a classic side-scrolling action game, developed by Blasphemous studio The Game Kitchen in partnership with Koei Tecmo. Ninja Gaiden: Ragebound will be published by Dotemu, and is planned for a Summer 2025 release.
Ragebound will be the first new game in the Ninja Gaiden series in over a decade, with …
Read moreThe mysterious Nintendo Switch Online test that begins later this month comes with a warning for people chosen to participate: Please don’t disclose or discuss it at all.
User OatmealDome was invited to the test and shared a page from the disclosure form that says, “We request that you do not discuss or disclose content from either the Nintendo Switch Online: Playtest Program test softwar…
Read moreSix years after the last Tomb Raider movie, Lara Croft is heading back to live-action at Amazon. Prime Video has announced that a new live-action Tomb Raider series is going forward from Phoebe Waller-Bridge, the creator of Fleabag and one of the leading performers in last year’s Indiana Jones and the Dial of Destiny. Waller-Bridge was attached to write the series in January 2023.
“If I c…
Read moreAnimal Crossing: New Horizons’ Bunny Day event revolves around collecting eggs in a variety of ways, and while you can eat them like fruit, their primary purpose is to be used in crafting. If you’re able to craft all of the new items from the event, Zipper T Come from online casino bangladesh . Bunny promises a special gift of some so…
Read moreApex Legends is celebrating the Lunar New Year with a sale, which runs from now until February 8 and includes a variety of fan-favorite legendary and epic skins and bundles.
The items in the Lunar New Year sale can only be purchased using Apex coins, but the 30% discount on legend skins should help ease the strain on your wallet. Even so, grabbing everything on sale will still c…
Read moreFar Cry 6 is set to release in less than two months, and we got a fresh look at the game during Gamescom 2021’s Opening Night Live event. The presentation included the debut of the story trailer, giving us more information on the conflict plaguing Yara and the role that brutal dictator Anton Castilla (Giancarlo Espositio) plays in it. The trailer shows Anton and his son Diego (Anthony Gonzalez)…
Read moreForeign institutional investors (FII) offloaded shares worth net Rs 549.37 crore, while domestic institutional investors (DII) added shares worth net Rs 595.70 crore on November 6, 2023, according to the provisional data available on the NSE.
For the month till November 6, 2023, FIIs sold shares worth net Rs 3,613.87 crore while DIIs bought shares worth net Rs 2,467.23 crore. In the…
Read more