Street Signs: SFBs dive into universal banking waters, Sebi's blank canvas

SFBs will remain in focus in Monday's trade after the RBI issued guidelines for their conversion into universal banks

From small fish to big sharks: SFBs dive into universal banking waters

Shares of small finance banks (SFBs) will remain in focus in Monday’s trade after the Reserve Bank of India issued guidelines for their conversion into universal banks. Among the criteria laid down on Friday are a minimum networth of Rs 1,000 crore, a profitability track record, gross non-performing loans of less than 3 per cent, and a net non-performing asset of less than 1 per cent in the past two financial years. Market players said the leader of the SFB pack, AU, is seen as the front runner. After the merger with Fincare SFB, AU SFB’s market value is more than 2x that of the second-biggest player in this space. Meanwhile, Equitas, Ujjivan, and Utkarsh too are seen as possible contenders. “A new set of investors could look to onboard some of the SFBs before they become full-scale banks. This could trigger a rerating in some stocks,” said an analyst.

Sebi’s blank canvas: Painting accountability without names

Usually, the Securities and Exchange Board of India (Sebi) mentions the names of stockbrokers or fund houses in its orders, barring their officials from allegedly indulging in front-running. However, in an order issued last week, the securities regulator refrained from naming them, instead using pseudonyms like AMC Broking and XYZ Securities. The regulator said the names of stockbrokers as well as persons or entities who have not been served any show cause notices were redacted but will be provided to courts and tribunals during proceedings. Legal experts say that the approach may be seen in future orders too and is aimed at preventing market intermediaries from getting maligned for no direct fault of theirs.

In the driver’s seat: Exchanges on patrol for analysts, advisors

The Securities and Exchange Board of India (Sebi) has notified the new norms that recognise a stock exchange as an ‘administration and supervisory body’ for certain intermediaries like research analysts and investment advisors. The move is among a series of steps planned by the regulator to crack down on unsolicited advice and stock recommendations through social media or by finfluencers. Following the amendment to the law done last week, anybody applying for registration with Sebi as a research analyst or an investment advisor will have to get enlisted with the administrative body first. Further, the market regulator has also revised the fee structure for registration. The steps have been taken to delegate certain important tasks related to the monitoring of such individuals by a stock exchange-led body. However, existing research analysts and investment advisors will already be enlisted with the new board, and the new norms will be effective after three months.