Secondary Market Advisory Committee (SMAC) met on Monday and discussed issues such as code of ethics for foreign entities that provide sectoral indices and timings for block deals.
The issue of increasing trading hours was also highlighted by managing director of one of the exchanges but was not discussed by the SEBI-appointed panel.
Another key issue that was discussed was how to protect retail investors when a broker defaults. Usually as a practice, when an investor books profit on a stock/asset, the broker keeps the money in his account for further investments. But this leaves a chance for the broker to not pay the investor in case he goes bankrupt.
A source who attended the meeting told Moneycontrol: “SEBI isn’t ready to intervene in managing brokerages but they are ready to make custodians who will keep broker funds and conduct stress tests time-to-time for these custodians. This will increase the confidence of investors and participants.”
For block deals, the panel discussed fixing the timings for twice a day compared to once a day now. Also, trades in the block deal window can be done in the range of 5 percent above or below the last traded price.
Currently, block deals have to be done 2 percent above or below the previous day’s closing price.