Direct Market Access (DMA) facilitates the purchasers of a dealer to immediately entry the trade buying and selling system via the dealer’s infrastructure to position orders with out handbook intervention by the dealer.
The new provision would come into power with rapid impact, the Securities and Exchange Board of India mentioned in a round.
Capital markets regulator Sebi on Wednesday allowed inventory exchanges to increase direct market entry facility to overseas portfolio buyers (FPIs) for participation in Exchange Traded Commodity Derivatives (ETCDs).
The new provision would come into power with rapid impact, the Securities and Exchange Board of India (Sebi) mentioned in a round.
Direct Market Access (DMA) facilitates the purchasers of a dealer to immediately entry the trade buying and selling system via the dealer’s infrastructure to position orders with out handbook intervention by the dealer.
Also, DMA offers sure benefits to brokers resembling direct management over orders, sooner execution of orders, lowered threat of errors related to handbook order entry, sustaining confidentiality, decrease influence prices for giant orders and implementing higher hedging and arbitrage methods.
“Based on representations obtained for enabling DMA facility to FPIs in ETCDs and deliberations by Commodity Derivatives Advisory Committee (CDAC) of Sebi, it has been determined to permit inventory exchanges to increase DMA facility to FPIs for participation in ETCDs,” the regulator mentioned.
This permission is subject to certain conditions that require brokers to follow procedure for application for DMA, operational specifications, client authorisation, and broker-client agreement, risk management, among others.
In September 2022, Sebi allowed FPIs to participate in the ETCDs in order to increase depth and liquidity in the market. To begin with, the regulator permitted FPIs to participate in cash settled non-agricultural commodity derivative contracts and indices comprising such non-agricultural commodities.
The regulator had already allowed institutional investors such as Category III Alternative Investment Funds (AIFs), Portfolio Management Services and Mutual Funds to participate in the ETCD market.
In a separate circular with Sebi, all debenture trustee registered in FINNET 1.0 system of Financial Intelligence Unit – India (FIU-India) will have to mandatorily enrolled in FINNET 2.0 module.
FINNET 2.0 module is aimed at providing quality financial intelligence for safeguarding the financial system from the abuses of money laundering, terrorism financing, and other economic offenses.
“Those reporting entities who have not yet registered themselves with FIU-India are required to be registered in FINNET 2.0 system/ module of FIU-India immediately in light of the FATF mutual evaluation,” the round famous.
FIU-India, in its letter final month, addressed to designated administrators and principal officers of debenture trustees, specified pointers, together with crimson flag indicators for detecting suspicious transactions by the Debenture Trustees beneath Prevention of Money Laundering (Maintenance of Records) Rules, 2005.
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