New Delhi, June 13 (IANS) Zerodha founder Nithin Kamath and Capitalmind Mutual Fund CEO Deepak Shenoy have drawn attention to restrictions imposed by US brokerage Fidelity on investors seeking to sell shares acquired in the recent SpaceX IPO, contrasting the practice with India’s regulatory framework.

Under Fidelity’s policy, investors who sell their allotted SpaceX shares within 15 calendar days of the stock’s trading debut — a practice known as flipping — risk losing access to future IPO allocations through the brokerage.

Reacting to the policy, Kamath on Saturday praised India’s capital market ecosystem and the regulatory safeguards put in place by market regulator SEBI and stock exchanges.

“Sure, things can be better, but it’s crazy how transparent and safe the Indian markets are compared to the US, all thanks to SEBI and the exchanges,” Kamath said in a post on X.

He added that Fidelity is not the only brokerage to impose such conditions, noting that similar restrictions appear to exist among other large US brokers as well.

Capitalmind founder and portfolio manager Deepak Shenoy also questioned the practice, suggesting that such restrictions would be difficult to justify under India’s regulatory regime.

“How is this legal? Imagine a broker telling you that you can’t sell a stock you got in an IPO in the first 15 days. SEBI will shut them down in a second in India,” Shenoy said in a post on X.

According to the brokerage’s guidelines, a first violation can result in a six-month suspension from participating in new equity offerings, a second offence may lead to a one-year ban, while a third instance could trigger a permanent restriction.

“The first day clients can sell without being labeled a flipper is the 16th calendar day after the IPO trades,” Fidelity said in its communication to investors.

Notably, SpaceX shares soared 19 per cent in their Nasdaq debut on Friday, propelling the company’s value past $2 trillion, which makes it the sixth-largest company in the United States and transforming Elon Musk into the world’s first trillionaire.

–IANS

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