Sebi norms on physical delivery settlement soon

Market regulator Securities and Exchange Board of India on Thursday said it expects to frame guidelines on enabling physical delivery- based settlement in the derivative segment by the end of July.

"The issue of enabling physical delivery-based settlement is (being) discussed between Sebi and stock exchanges and we expect to reach a conclusion by end of this month," Sebi chairman C B Bhave told reporters on the sidelines of a function in Mumbai on Thursday.

"We should see something before the end of July," Bhave said.

In March, Sebi had decided to allow physical delivery in the equity derivatives segment to bring down speculation in the stock markets and had said it will hold talks with the stock exchanges and work on the system.

Bhave also said Sebi is considering whether distributors of financial products need to be regulated.

"We are looking at the issue and once we decide on it, we will bring out a consultative paper."

Replying to a query on the slow progress of mutual fund trading platform launched on stock exchanges, Bhave said, the process was new and took time to build up.

"We want to talk to stock exchanges. . .we want to give sufficient time, before arriving at any conclusion as to why there are not sufficient volumes," he said.

Sebi is also looking at launching options in the currency derivative segment fairly soon.

"RBI in its policy has said that currency options would be permitted. The technical group between RBI and Sebi is working on this and we expect a decision soon," Bhave said. Sebi is also considering issue of listing of exchanges.

"We have referred to a committee under the chairmanship of former RBI Governor, Bimal Jalan. There were issues relating to the 'infrastructure institutions in the market' that is stock exchanges, depositories and clearing corporations. The question was that can these institutions being infrastructural in nature be driven purely for profit and what kind of conflicts can arise out of that," Bhave said.

It needs to be ensured that the infrastructure nature of these institutions is protected and no problems are created in that particular role of these institutions, he said.