Overview
- The consultation proposes allowing FPIs to use same-day sale proceeds to meet purchase obligations, limited to outright transactions across different securities.
- Buy and sell trades in the same security within a settlement cycle would remain on a gross basis to curb leverage, concentration risks and potential manipulation.
- Securities would still settle gross between FPIs and custodians, so Securities Transaction Tax and stamp duty would be unchanged.
- SEBI says risks are manageable under clearing corporations’ default waterfall and Core Settlement Guarantee Funds, with custodians needing system upgrades to validate net obligations.
- The plan requires regulatory changes by SEBI and the RBI and is open for public comments until February 6, and it accompanies onboarding measures such as the SWAGAT–FI framework and digital signatures.