New Delhi, June 13 (IANS). Zerodha founder Nitin Kamath and CapitalMind Mutual Fund CEO Deepak Shenoy have drawn attention to the restrictions imposed by US brokerage firm Fidelity on investors acquiring shares in the recent SpaceX IPO and compared the arrangement with India’s regulatory framework.
Under Fidelity’s policy, investors who have been allotted shares in the SpaceX IPO may lose their right to receive future IPO allocations through Fidelity if they sell them within 15 calendar days of the listing of the shares, called ‘flipping’.
Commenting on the policy, Nitin Kamath praised the safeguards implemented by India’s capital markets and markets regulator SEBI and stock exchanges.
“There’s definitely still room for improvement, but it’s surprising to see how much more transparent and secure the Indian markets are than the US because of SEBI and the exchanges,” he said in a post on X.
Kamath also said that not only Fidelity imposes such conditions, but similar restrictions are seen in other big brokerage companies of America also.
Deepak Shenoy, founder and portfolio manager of CapitalMind, also raised questions on this arrangement and said that it would be difficult to justify such terms in India’s regulatory framework.
Posting on X, he said, “How can this be legal? Imagine if a broker tells you that you cannot sell the shares received in an IPO for the first 15 days. In India, SEBI will take immediate action in such a situation.”
According to the brokerage company’s guidelines, a first-time violator may bar the investor from participating in new equity offers for six months. A second violation could result in a one-year ban, while a third violation could result in a permanent ban.
“Investors can sell their shares from the 16th calendar day after the listing of the IPO and will not be considered flippers,” Fidelity said in its message to investors.
It is noteworthy that during the listing on Nasdaq on Friday, SpaceX shares registered a sharp rise of 19 percent. With this the company’s market value exceeded $2 trillion, making it the sixth most valuable company in America. With this, Elon Musk became the world’s first trillionaire (a person with assets worth one trillion dollars).
–IANS
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