Now you will be able to trade in stocks, commodities such as gold, crude and wheat through a single demat account from October 2018. With this, a trader is not required to have multiple demat accounts for different exchanges. With the integration of stocks and commodities trading on a single exchange, investors and traders will be able buy and sell stocks and commodities with single demat and bank accounts. According to market experts, the convergence of stock and commodity exchanges will allow exchanges to cross-list products such as NSE and BSE will be able to list commodity derivatives while MCX and NCDEX will be able to list stocks and stock derivatives.
In a major development on Thursday, India’s capital market regulator SEBI (Securities and Exchange Board of India) said that all the stock and commodity exchanges will be able to provide trading in stocks and commodity derivatives. Welcoming the Sebi decision, BSE’s CEO Ashishkumar Chauhan said this will help participants in various markets get a highly regulated, safer, more transparent trading, clearing and settlement framework when implemented fully.
As of now the bare minimum requirement to trade in company stocks are a trading account with a SEBI registered broker, a demat account with the depository participant and a bank account. The same process is repeated if one wants to trade in commodity derivatives products. With the latest ruling of SEBI, the pain of opening up multiple demat and bank accounts will be taken care off and market participants will be able to trade in stocks and commodities from a universal demat account from October 2018.
Other key decisions at SEBI board meeting
- SEBI said that all the credit rating agencies can’t hold more than 10% of their rival firms and has allowed QIPs (qualified institutional placement) as one of the routes to achieving minimum 25% public shareholding. In addition to this, SEBI said the promoters of the companies will now be allowed to sell up to 2% of their equity through secondary markets.
- SEBI Chief Ajay Tyagi said that the regulator is trying to simplify and rationalise norms for REITs (Real Estate Investment Trusts) and all the firms will have to face action for WhatsApp leak of financial details investigating more companies in information leak case.
- SEBI decided to put a 10% cap cross-shareholding on all the mutual funds and moreover will now up to 10% and all the mutual funds will now have a year to conform to new cross holding terms. The new measure may have an impact on the shareholding pattern of UTI Asset Management Company (AMC), requiring its promoters to lower their stake to 10% or below in next one year.
- As State Bank of India, Punjab National Bank, Bank of Baroda and Life Insurance Corporation are having their own mutual funds and at the same time, each of them holds an 18.24% stake in UTI AMC will now be required to limit their shareholding to 10%.
- Amid the booming domestic equities, SEBI Chairman Ajay Tyagi said the regulator has decided to relax entry norms for FPIs (foreign portfolio investors) who are willing to invest in the Indian markets.
- Besides this, SEBI would allow listing of security receipts issued by an asset reconstruction company (ARC) on stock exchange platform. In a serious warning to companies for leakage of key financial details, all those responsible, including auditors, would face action and the rules would be strengthened if required, Ajay Tyagi said further.