The Securities and Exchange Board of India (Sebi) will hold a meeting of foreign institutional investors (FIIs) and custodians to discuss trade margins to be levied on institutional trade from April 21, said its Chairman Chandrashekhar B Bhave here on Tuesday.

“Foreign Institutional Investors and custodians have requested a meeting with us. We will certainly meet all institutions, which have any difficulty, as we go along,” he said at a seminar organised by Ernst &Young in association with the Hong Kong Stock Exchange, IL&FS and NSE on ‘Financial sector co-operation between India and Hong-Kong’. Currently, institutional trades in the cash market are exempt from margins. But according to a Sebi circular issued on March 20, institutional investors will need to pay margins from April 21, 2008, on a T+1 basis.

 The margins will be collected from the custodian upon confirmation of trade. “Subsequently, with effect from June 16, 2008, the collection of margins will move to an upfront basis,” said the circular.

Mr Bhave informed that the proposed short-selling by institutions will begin from April 21.

Further, the market regulator said that Sebi will also take inputs from companies on cross-border listing and will try to smoothen this process.

“It is our belief that companies, which are listed abroad should be interested in Indian markets. It should be our effort to see that the listing can be facilitated. Similarly, Indian companies having operations in other countries would be interested in listing abroad as well,” he added.

Sebi will also consider issues and suggestions raised at the workshop on Indian depository receipts (IDRs). “So far, it (Sebi) has not got any response on IDRs despite the regulation being out,” said Mr Bhave adding that he expected cross-border fund flows in Asia to go up.

Slashes fees

Meanwhile, Sebi has reduced the fee for filing offer documents of public issues and mutual funds in a move that will benefit common investors. In addition, Sebi has also reduced fees for offer documents for buyback of securities and registration fee for venture capital funds. The decision to reduce the fees, which comes into effect from April 1, 2008, was taken at the Sebi board meeting in New Delhi last month.

The fee for filing offer documents for public issue will range from Rs 25,000 to Rs 3 crore depending upon the size of the issue. For the rights issue, the fee will range from Rs 25,000 to Rs 5 lakh, depending upon the size of the offer.

For the buyback of shares, the fee will be between Rs 1 lakh and Rs 3 crore, whereas for the mutual funds the fee has been reduced from 0.03 per cent to 0.005 per cent, subject to a ceiling of Rs 50 lakh.