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Lockdown: Sebi writes state govts to allow market personnel to reach offices

Business Finance

Press Trust of India  |  New Delhi 

Amid problems faced by stock brokers and other staff related to market entities in reaching their offices due to a nationwide lockdown, markets regulator Sebi on Wednesday asked all the states and union territories to allow such personnel to commute to their workplaces for smooth functioning of the capital markets.

The development comes amid a 21-day nationwide lockdown announced by Prime Minister Narendra Modi on Tuesday as part of efforts to curb the spread of coronavirus.

However, the home ministry said capital and debt market entities notified by Sebi will be exempted from such closure.

Stock brokers' association Anmi and the Commodity Participants Association of India (CPAI) said brokers are facing problem while commuting to their respective offices due to lockdown as police are not allowing any movement.

Consequently, the Securities and Exchange Board of India (Sebi) has written to all the states and union territories to allow movement of personnel of the entities notified by the regulator for the smooth functioning of the capital markets.

Besides, the regulator has asked to facilitate the functioning and movement of its employees, according to the letter.

"Today, Sebi has written to chief secretaries/ administrators of all states/ UTs, requesting them to facilitate the functioning and movement of personnel of entities notified by Sebi for the smooth operation of the capital markets," a Sebi spokesperson told PTI.

In the letter, Sebi has referred to an order issued by the Ministry of Home Affairs, which said: "The order...provides that commercial and private establishment shall be closed down but that the capital and debt market service as notified by the Securities and Exchange Board of India shall be exempted from such closures."

This empowered Sebi to notify capital and debt market services from the applicability of this order and guidelines with respect to functioning of commercial and private establishments, the letter noted.

Accordingly, the regulator-notified entities exempted from the nationwide closure are stock exchanges, clearing corporations, depositories, custodians, mutual funds, asset management companies, stock brokers, trading members, clearing members, depositories participants, registrar and share transfer agents.

Besides, credit rating agencies, debenture trustees, foreign portfolio investors, portfolio managers, alternative investment funds and investment advisers have also been exempted.

Several employees of market-related entities have been facing problems in commuting even as stock exchanges and brokers have been classified as essential services by the central and state governments.

"While almost all of our team is working remotely from home, there are very few critical jobs that may still need the physical infrastructure keeping customers' interest in mind.

"Few of our employees faced challenge today (Wednesday) in reaching office but we are sure authorities will take necessary steps for smooth functioning of operations and very few selective critical people are given access to reach their offices, said Lav Chaturvedi, executive director and chief executive officer, Reliance Securities.

Stock broker Abhinav Agarwal, who is a director of Abhipra Capital, said the biggest difficulty is that the bare minimum staff is not able to reach the office, trading may be done online but back-office work requires people. "They are afraid because of police behaviour. Families are also pressurising not to come out. Meeting with regular compliances for day-to-day trading is becoming impossible without the staff."

Another broker Deepak, who is a director at Jyoti Portfolio, said that by facing a lot of difficulties, only four staff members could reach office and now, those people are refusing to come on Thursday.

Meanwhile, investment services company Geojit Financial Services said it will continue to offer its services to meet the investment needs of its clients with a limited number of staff.

Meanwhile, Anmi, which has around 900 brokers as members, has appealed to Sebi to allow a systematic closure till the nationwide lockdown remains in force.

On Tuesday, the Association of National Exchanges Members of India (Anmi) requested Sebi to close stock exchanges for at least two days, which will give brokerage firms time to close their entire outstanding positions, in case all states do not declare stock broking as an essential service.

Besides, CPAI also requested Sebi "to close down all exchanges operations with appropriate directions till March 31, initially if the request of classifying broking as essential service cannot be considered as feasible and take a fresh review of situation later".

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, March 25 2020. 20:34 IST