SEBI’s Net Settlement Plan for ETFs: Reducing Price Risk and Improving Market Efficiency
The article reports that the Securities and Exchange Board of India (SEBI), in coordination with stock exchanges and clearing corporations, is working on introducing a net settlement mechanism for exchange-traded funds (ETFs). The objective is to reduce price risk faced by market makers and lower the cost of providing liquidity, thereby improving ETF price efficiency.
At present, ETF market makers often operate o
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