SEBI’s Master Circular for Stock Exchanges and Clearing Corporations dated December 30, 2024 inter-alia stipulates that no institutional investor shall be allowed to do day trading, i.e., square off their transactions intra-day. Representations were received from market participants highlighting that the gross settlement of transactions results in additional liquidity requirements, increased funding costs due to forex slippage and operational inefficiency for FPIs, particularly during days of index rebalancing. Accordingly, with an objective to enhance operational efficiency and reduce cost of funding for FPIs, it is decided to permit net settlement of funds for outright transactions undertaken by FPIs in cash market.
For the purpose of this circular, ‘outright transactions’ shall mean either a purchase or a sale transaction, but not both, in a security in a settlement cycle undertaken by an FPI.
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