SEBI

Subject :Economy

Context:

SEBI suggested various steps to strengthen the capital market.

Details:

ISEBI asked stock exchanges to set up an Investor Risk Reduction Access (IRRA) platform.
- It will give investors an opportunity to cancel pending orders in case of disruption of trading services.
SEBI also decided to amend regulations to strengthen the focus and governance mechanisms of market infrastructure institutions (MIIs).
It also decided to phase out the buyback in a gradual manner through the stock exchange route.
It will also introduce a framework to facilitate execution-only platforms (EOPs) for direct plans of mutual fund (MF) schemes.
- EOPs may be granted registration under either of the two categories: category-1 EOP as an agent of asset management companies (AMCs), registered with the Association of Mutual Funds of India (AMFI) or category-2 EOP as an agent of investor, registered as a stock broker.

Concept:

Market Infrastructure Institutes:

MIIs are institutions providing infrastructure of trading, settlement and record keeping and include stock exchanges, clearing corporations and depositories.
Stock exchanges, depositories and clearing houses are all Market Infrastructure Institutions and constitute a key part of the nation’s vital economic infrastructure.
MIIs helps in optimal use of money in the economy and fostered economic development.
They constitute the nucleus of the capital allocation system and are indispensable for economic growth and have a net positive effect on society like any other infrastructure institution.
That MIIs are systemically important in India is clear from the phenomenal growth of these institutions in terms of market capitalization of listed companies, capital raised and the number of investor accounts with brokers and depositories and the value of assets held in the depositories’ account.
Currently, MIIs are required to have a minimum net worth of not less than Rs 100 crore on a continuous basis.

What are the specific institutions in India that qualify as MIIs?

Among stock exchanges, the SEBI lists seven, including the BSE, the NSE, the Multi Commodity Exchange of India and the Metropolitan Stock Exchange of India.
There are two depositories — charged with the safekeeping of securities and enabling their trading and transfer — that are tagged MIIs: the Central Depository Services Ltd. and the National Securities Depository Ltd.
The regulator also lists seven clearing houses including the Multi Commodity Exchange Clearing Corporation.
Clearing houses, for their part, help validate and finalise securities trades and ensure that both buyers and sellers honour their obligations