Dividend stripping continues unabated

Many fund houses, which were shoring up their assets under management by launching schemes that aid bonus stripping, seem to have changed their tactic. The new move is to aid dividend stripping. Sectoral people say there are at least three schemes from a single fund house, running currently, that will help dividend stripping. In May, the Association of Mutual Fund in India had warned fund houses about schemes that aid bonus stripping. Bonus or dividend stripping, typically, involves an investor buying a bonus or dividend plan of a mutual fund scheme, book a loss on it and then set it off against capital gains from other sources.

Exchanges divided over market making on SME platform

The country's leading stock exchanges seem to be divided over the role of market making on the SME (small and medium-sized enterprises) platform. One exchange has asked the Securities and Exchange Board of India to raise the minimum period for market, making from the existing three years to five years, believing it to be crucial for providing liquidity in the segment. Its rival, however, wants this period to be reduced to a year or even six months, as it feels it is difficult to get brokers and merchant bankers to commit money to market making in these companies for three years.

Sebi mulls plan to provide Asba for all investors

Beginning 2016, the Securities and Exchange Board of India (Sebi) will make applications supported by blocked amounts (Asba) compulsory for all investors in initial public offerings (IPOs). However, the reality is that most retail investors still don't have access to Asba, as banks have been unable to provide the facility. As a way around this hurdle, Sebi plans to ask brokers to provide Asba to retail investors on a commission basis. Sebi wants to ensure that with the reduced time line of IPO closing and listing to only seven days, retail investors are not left out due to lack of Asba reach. Sebi has also alerted the Reserve Bank of India and banks on the issue.