The SEBI board on Saturday approved a proposal to provide greater flexibility to social stock exchanges (SSEs) and introduce a framework for small & medium (SM) REITs.

• Also read: REIT portfolios see rejig as IT firms give up office space

The board, however, did not take any decision on the much-anticipated delisting regulations. “Since the number of delisting applications over the past few years is small and the data set is extremely limited, the board has guided us to do further consultations,” said SEBI chairperson Madhabi Puri Buch.

The board approved halving of the minimum issue size of Zero Coupon Zero Principal Instruments (ZCZPs) by Not for Profit Organizations (NPOs) on SSEs to ₹50 lakh from ₹1 crore. The minimum application size will be reduced to ₹ 10,000 from ₹2 lakh to enable wider participation. More NPOs will be made eligible for registration and fundraising through the issuance and listing of ZCZPs on SSEs.

The board gave its nod for a new framework on SM REITs, with an asset value of at least ₹50 crore vis-à-vis ₹500 crore for existing REITs. The framework will provide for the structure of SM REITs, migration of existing structures meeting certain specified criteria and obligations of the investment manager.

• Also read: SEBI proposes 4-month cool-off period for trading plans

The Board approved a regulatory framework for index providers. This will include a framework for registration of index providers which license ‘Significant Indices’ that shall be notified by SEBI based on objective criteria and in accordance with IOSCO Principles for Financial Benchmarks.

“Changes in the SSE framework will help the NPOs to raise funds. Reducing the minimum application size in ZCZP issue will ensure wider participation of public at large in the fund raising process by NPOs. The regulatory framework for Index providers will give more transparency and accountability in the securities market,” said Rohit Jain, Managing Partner, Singhania & Co.

Any fresh investment made by an AIF, beyond September 2024, will be held in dematerialised form. Existing investments, however, have been exempted from the said requirement, except in certain cases. The mandate for appointment of custodians, currently applicable to Category III AIFs and to Category I and II AIFs with corpus more than ₹500 crore, will be extended to all AIFs.

Settlement cycle

Buch said the market will move towards T+0 settlement by March next year, instead of a one-hour settlement cycle as envisaged earlier. From then on, the move towards instantaneous settlement could take another year. These shifts will be optional. Buch further added that fears that this could lead to fragmentation of liquidity are unfounded.

“The feedback we have got is that technologically it is much better if the first step towards T+0 rather than one-hour settlement,” said Buch.

Buch said the regulator will consult all stakeholders including brokers and end investors before approving any extension of timings for F&O trading. NSE is reportedly finalising plans to extend trading hours for this segment in a phased manner starting with a separate trading window from 6 pm to 9 pm, which could later be increased to 11:30 pm.