This was Sebi’s 211th board meeting and Chairman Tuhin Kanta Pandey’s third since he took over as a Sebi chief in March.
10 key takeaways
1) Minimum public offer and shareholding requirement for IPOs
Sebi approved changes in the minimum public offer (MPO) and timeline for meeting minimum public shareholding (MPS) requirements. The current Securities Contracts (Regulation) Rules (SCRR) mandated issuers with a post issue market capitalisation above Rs 1,00,000 crore to offer to the public Rs 5,000 crore and at least 5% of the post issue market cap.Read More: Sebi eases minimum public offer norms, minimum public shareholding timelines for large IPOs
2) FPI access
The capital markets regulator approved a single-window clearance system to make it easier for foreign investors to access Indian markets.
Read More: Sebi eases FPIs entry into Indian markets through single-window clearance
3) Widens IPO anchor book
In a move aimed at broadening the pool of long-term institutional investors in initial public offerings (IPOs), the Securities and Exchange Board of India (Sebi) on Friday amended the ICDR Regulations to extend anchor investor participation beyond domestic mutual funds. Sebi has also increased the overall reservation for the anchor portion from one-third to 40%.
Also Read: Sebi widens IPO anchor book to include insurers and pension funds, raises reservation to 40%
4) REITs get equity status
Market regulator Securities and Exchange Board of India (Sebi) on Friday approved re-classification of Real Estate Investment Trusts (REITs) as equity, paving way for a higher participation of mutual funds in them. The regulator also retained the ‘hybrid’ classification for InvITs for the purpose of investments by MFs and specialised investment funds.
Also Read: Sebi board meeting: REITs get equity status, move set to boost mutual fund investments
5) Exit load for mutual funds cut to 3%
In a bid to strengthen investor protection and improve transparency while deepening financial inclusion, market regulator Securities and Exchange Board of India (Sebi) has slashed maximum permissible exit load from 5% to 3%. Sebi noted that most schemes currently charge between 1% and 2% as exit load.
Also Read: Sebi cuts exit load cap to 3%, revises incentives for mutual fund distributors
6) Related Party Transactions
The regulator has approved amendments related to norms on Related Party Transactions (RPT). These changes include introduction of scale-based thresholds based on annual consolidated turnover of the listed entity, for determining material RPTs. Some other amendments include revised thresholds for approval by the Audit Committee, for RPTs undertaken by subsidiaries and simpler disclosure requirements for smaller RPTs.
7) Separate category of AIF schemes
Introduction of a separate category of AIF schemes, limited exclusively to Accredited Investors only (AI-only schemes), and offering the scheme specific regulatory flexibilities in terms of less compliance around investor protection. Extension of additional relaxations and operational flexibilities to Large Value Funds (LVFs) for accredited investors.
Sebi also approved provision for existing eligible AIF schemes to opt into AI-only or LVF classification, thereby availing associated benefits, subject to conditions prescribed by it.
8) Launch of ‘India Market Access’ website for FPIs
Sebi launched a new website titled ‘India Market Access’ (www.indiamarketaccess.in), developed as a dedicated platform for current and prospective FPIs.
This move comes after FPIs highlighted difficulties in navigating India’s regulatory landscape, citing the challenge of accessing information spread across different regulations and institutions. The lack of a centralised platform often made compliance processes difficult to comprehend.
9) Regulatory outreach and response
To strengthen its regulatory outreach and better serve India’s growing investor base, Sebi will establish local offices in major state capitals and cities in a phased manner. In the first phase, offices will come up in Chandigarh, Jaipur, Lucknow, Guwahati, Bhubaneswar, Vijayawada, Hyderabad, and Bengaluru.
10) Review of provisions governing market infrastructure institutions (MII)
Sebi approved key measures to enhance governance of MIIs such as stock exchanges and clearing corporations. Two Executive Directors (EDs) will now be appointed as heads of “Vertical 1: Critical Operations” and “Vertical 2: Regulatory, Compliance, Risk Management, and Investor Grievances.” They will serve as Key Management Personnel (KMPs) and sit on the Governing Board, reporting to the MD but appraised by the Nomination and Remuneration Committee.
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