Liquidity Breach Alert for ETFs
SEBI mandates AMCs and Market Makers to monitor and maintain buy-side liquidity for ETFs during market hours. Alerts must trigger if bid volume drops below 50% of creation unit size over 7 days. AMCs must enable direct redemptions and take corrective action. This ensures fair pricing, investor access, and smooth ETF trading.
🛡️ Why SEBI Requires Buy-Side Monitoring by AMCs
SEBI aims to ensure that ETFs remain liquid, fair-priced, and tightly linked to their NAVs. Since AMCs oversee ETF design, dealer selection, and quoting mechanisms, SEBI rightly places intraday liquidity monitoring responsibility on AMCs and their designated Market Makers (MMs). This framework prevents large bid-ask spreads and discourages price distortions.
📊 Service for Buy-Side Monitoring
- We provide screens to save basic information about ETFs like creation unit size etc
- We watch the buy quantity for ETF during specified market hours
- If bid volume is below a particular threshold for an ETF, we trigger liquidity breach alert
- We have provided feature to manage list of recipients for liquidity breach alert
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