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SEBI Innovation Sandbox: Pilot for Fractional Shares

30 July 20251 min read
BANKING & FINANCESEBI InnovationSandbox: Pilot forFractional Shares30 July 2025safalsetu.com

Why in the news

SEBI agreed to let a startup try fractional share trading, which could reshape equity trading in India.

Key facts

  • Pilot runs via SEBI’s innovation sandbox; first of its kind.
  • Company: Bengaluru-based Xaults.
  • Fractional shares are partial units of a stock or ETF, letting investors commit smaller sums; popular in the United States.
  • Custody: held at the depository, not the broker, keeping ownership with the investor while brokers still offer them.

Next steps

  • Xaults demonstrates use-cases over 3-4 months.
  • Live testing starts only if SEBI moves it into the regulatory sandbox after review.

Significance

  • Small investors could buy high-priced stocks, possibly lifting retail participation.

Exam angle

  • Startup: Xaults; custody: depository level.

Test yourself

1. Which startup became the first to test fractional shares in SEBI's innovation sandbox?

The notes name Bengaluru-based startup Xaults.

2. At which level did Xaults propose holding fractional shares?

Xaults proposed holding them at depository level, keeping ownership with investors.

3. Over how long will Xaults demonstrate use-cases to SEBI and market participants?

The notes state demonstrations over 3-4 months.

This topic is part of Daily Current Affairs 30 July 2025 (15 topics).

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