Page 22 - Banking Finance April 2023

MUTUAL FUND

Funds in India (AMFI), Sebi observed kets regulator Securities and Exchange "The company shall not purchase more
that fund houses include certain illus- Board of India (Sebi). than 25 per cent of the average daily
trations in their advertisements, pre- trading volume (in value) of its shares
Sebi defines QSBs as entities who, be-
sentations and brochures that can or other specified securities in the ten
cause of their size and scale of opera-
"lead investors to believe that they will trading days preceding the day in
tions, can likely impact investors and
be receiving fixed returns for their in- which such purchases are made," Sebi
the securities market, as well as gov-
vestments". said in a circular. Under the route, a
ernance and service standards. These
company will not place bids in the pre-
"Illustrations are shown depicting fu- stock brokers cater to the needs of a
open market, first thirty minutes and
ture returns on the basis of assump- large number of investors.
the last thirty minutes of the regular
tions and projections. Disclaimer and
A stock broker will be designated as
trading session. Its purchase order
assumptions are made in fine print
QSB on the basis of four parameters -
price should be within the range of ±1
that are likely to be missed out by the number of active clients, total avail-
per cent from the last traded price.
investors," the letter stated.
able assets of clients, trading volumes.
All companies as well as their ap-
The letter specifically highlights the and end-of-day margin obligations. All
pointed brokers should ensure the
use of systematic switch plans (SWPs) stock brokers with a total score
compliance with the provisions, Sebi
in illustrations to indicate regular re- greater than or equal to five on these
said, adding that the stock exchanges
four parameters are identified as QSBs.
turns.
should monitor these compliance and
Sebi said it may include more QSBs by
SWP is the opposite of SIPs as they al- in case of any non-compliance, they
considering additional parameters such
low investors to withdraw a certain should impose appropriate fines or
as compliance, grievance redressal
portion of their corpus every month. other enforcement actions as deemed
scores and proprietary trading vol-
The facility is mostly used by retirees fit.
umes.
to meet their regular expenses.
On the margin requirement for depos-
The scores are to be calculated on an
The regulator has asked fund houses to its in an escrow account, Sebi said the
annual basis (financial year) and the
abide by the advertisement code set by escrow account shall consist of cash
revised list of QSBs will be released
Sebi. The regulations do not allow fund and/or other than the cash.
jointly by stock exchanges, in consulta-
houses to promise returns to investors
tion with Sebi.
since mutual funds invest in equity and DSP Mutual Fund launches
A stock broker designated as a QSB is
debt markets, which go through ups
required to meet enhanced obligations special hotline for women
and downs depending on various fac-
and discharge responsibilities to ensure DSP Mutual Fund has launched an ex-
tors.
appropriate governance structure,
clusive hotline for women to encour-
appropriate risk management policy age them to learn more about invest-
Qualified Stock Brokers:
and processes, scalable infrastructure
ing. Women can give a missed call on
How are they crucial for and appropriate technical capacity, 8657011333 if they want to learn more
framework for orderly winding down, about mutual funds, investing or sim-
markets?
robust cyber security framework, and
ply about how they can take their first
National Stock Exchange (NSE) issued investor services.
steps toward building a financial plan,
a list of 15 designated Qualified Stock
a press release said.
Brokers (QSBs), including Zerodha
SEBI tightens norms for
Broking, 5paisa Capital, HDFC Securi- Women think differently than men and
ties, ICICI Securities, Anand Rathi securities buybacks may need more personalized guidance
based on their attitude towards money
Share and Stock Brokers, Angel One, The capital markets regulator Sebi
and their confidence levels, said the
IIFL Securities, Kotak Securities, and placed restrictions on placement of
release.
Motilal Oswal Financial Services. This bids, price and volume on companies
list was announced following a Febru- going for buyback of securities through DSP's Winvestor Pulse 2022 Study, con-
ary 2023 direction by the capital mar- stock exchange route. ducted with research agency partner
BANKING FINANCE | APRIL | 2023 | 19