Zerodha founder Nithin Kamath and Capitalmind Mutual Fund CEO Deepak Shenoy have raised concerns about the limitations imposed by US brokerage Fidelity on investors looking to sell shares obtained in the recent SpaceX IPO. Fidelity’s policy penalizes investors who sell their SpaceX shares within 15 days of the stock’s trading debut, potentially impacting their access to future IPO allocations through the brokerage.
Kamath commended India’s capital market ecosystem and the regulatory protections established by market regulator SEBI and stock exchanges in response to Fidelity’s policy. He highlighted the transparency and safety of the Indian markets compared to the US, attributing it to the efforts of SEBI and the exchanges.
Expressing skepticism towards Fidelity’s restrictions, Shenoy questioned the legality of such measures under India’s regulatory framework. He emphasized the contrast between the US and Indian regulatory environments, suggesting that similar restrictions would face swift action from SEBI in India.
Fidelity’s guidelines outline penalties for violating the selling restrictions, including potential suspensions from participating in new equity offerings. The brokerage stipulates that selling SpaceX shares before the 16th calendar day after the IPO trades could result in punitive actions against investors.
SpaceX witnessed a remarkable 19% surge in its Nasdaq debut, pushing its valuation beyond $2 trillion and solidifying its position as the sixth-largest US company. This surge also elevated Elon Musk to the status of the world’s first trillionaire.
