The Hindu Editorial Analysis : 30th March 2023

30/03/2023

Table of Contents

The Hindu Editorial Analysis

The Importance of Reading The Hindu Editorial: Reading The Hindu newspaper has several benefits, including improving reading skills, facilitating comprehension, staying informed of current events, enhancing essay writing, and more. For individuals aiming for a career in banking, reading editorials is crucial for vocabulary building. In this article, we will examine today’s editorials, provide practice questions, and highlight important vocabulary words.

Sebi clears ASBA.

The Sebi board on Wednesday approved an ASBA like facility for secondary market trading where the funds earmarked for trading by an investor will be blocked and released only when there is a demand from the clearing corporation to settle such trades.
The regulator’s board also gave nod to set up a mechanism under which brokers can alert market abuse and fraud, a Sebi release said.
ASBA (application supported by blocked amount) is an IPO application process under which the application money by an investor is blocked in that investor’s bank account.
And once the IPO application is approved,the application money is debited from the investor’s account.
The investor earns interest on the blocked amount till it’s debited.In case the investor doesn’t get allotment, the block is released.
A similar process will now be introduced in the secondary market. This facility will be optional for investors as well as stock brokers, a Sebi release said.
The regulator said that there were several benefits for such a facility.
Among those, the investor will earn interest on his blocked funds in his savings account till the time amount is debited.
It will also facilitate direct settlement with the clearing corporation (CC), without passing through pool accounts of the intermediaries, thereby providing client level settlement visibility to the CC and thus avoiding the risk of commingling of clients’ funds and securities.
This facility will also eliminate the risk of inadvertently erroneous OF fraudulent reporting by intermediaries. This will also eliminate the risk of default and no adverse impact on client pay-out.
“It shall bring efficiency in the secondary market by allowing usage of the same blocked amount towards margin and settlement obligations and thus result in lower working capital requirements,” Sebi said.

Practice Questions:

What did SEBI say on Wednesday?
What type of process will be introduced in the market?

Important Vocabs:

Inadvertently- not meant
Intermediaries- organization that helps two people or groups to reach an agreement
Fraudulent- done in order to cheat somebody
erroneous- based on wrong information
Vacillate- waver, don’t able to take any decision