Capital market regulator SEBI has postponed implementation of the clause restricting transaction of less than ₹25 crore in passive funds to stock exchanges.

In a circular issued on Friday, SEBI said based on further feedback received from stakeholders, it has been decided that the clause 2(IV)(A) of the circular will be applicable with effect from May 1, 2023.

In order to enhance liquidity in units of ETFs on stock exchange platform, SEBI had earlier decided that direct transaction in ETFs with AMCs shall be facilitated for investors only for transactions above a specified threshold. In this regard, to begin with, any order placed for redemption or subscription directly with the AMC must be greater than ₹25 crore. The aforesaid threshold shall not be applicable for market makers and will be periodically reviewed, SEBI had said on May 23.

This new norm, which was supposed to be effective July 1, was deferred to November 1 and now, May 2023.