SEBI to allow accredited investors, make capital markets in 2021

SEBI to allow accredited investors, make capital markets investing easier, tighten independent director:

In order to offer investors easy access to public offerings/rights issues through various payment channels, Sebi has also decided to allow banks other than regular banks to act as bankers in these matters.

To strengthen corporate governance practices and attract more investors, Sebi has adopted stricter standards for independent directors, lowered the minimum membership fees for REITs and InvITs, and decided, among other things, to create a framework for investors. accredited.

In order to offer investors easy access to public offerings/rights issues through various payment channels, Sebi has also decided to allow banks other than regular banks to act as bankers in these matters.

At Tuesday’s meeting in Mumbai, Sebi’s board of directors agreed to allow residents of Indian fund managers to participate in foreign portfolio investors and decided to change the rules for mutual funds to allow investments of an amount minimum “if it’s the skin in the game”. Asset Manager (AMC) based on the risk associated with such agreements.

Continuing its efforts to strengthen the regulatory framework for independent directors, Sebi approved several changes to the rules for the appointment, reconfirmation, and dismissal of independent directors, a provision that will also give public shareholders a more active voice in the appointment and reconfirmation of these independent directors. directors. drivers, administrators.

The new rules will come into effect in January 2022.

Under the proposed changes, a listed company must publish a letter of resignation from an independent director and a one-year cooling-off period applies to an independent director who transforms into a consultant with full rights. – Fixed-term director in the same company/holding/subsidiary/shareholder or in a company belonging to the share group.

Furthermore, the process that the Nomination and Remuneration Committee (CNR) must follow to select candidates for appointment as an independent director will be made more transparent. This includes disclosing the skills needed to appoint an independent director and how the proposed candidate fits, Sebi said in a press release.

The Observatory continued its research on the market for investment funds (REITs) and infrastructure investment funds (InvITs) and decided to reduce its minimum insurance base and trading size. The minimum application amount will be between Rs 10,000 and 15,000 and the trading lot will be one unit per REIT and requests. Under current standards, the minimum subscription under current rules should not be less than Rs 1 lakh for invitations and Rs 50,000 for REITs.

The assignment to each investor must be made in multiples. Currently, a commercial lot must contain 100 pieces in the first offer, and in a subsequent offer, each lot must consist of the number of pieces in the commercial lot at the time of the first offer.

In order to lighten the compliance burdens for listed entities, the proposal was also approved to consolidate the listing rules relating to non-convertible repayable debt securities and preference shares into a single regulation.

The new structure allows issuers other than REITs and private lenders with the existence of fewer than 3 years to access the bond market under certain conditions.

Sebi’s board of directors also approved a proposal to include residents of Indian fund managers among foreign portfolio investors. In addition, the use of inside information will be prohibited, increasing whistleblowers’ compensation to 10 million more than the current value of 1 million.

The regulator will, among other things, amend the Sebi (Credit Rating Agency) regulation of 1999. These regulations have been amended to define a credit rating agency (CRA) in terms of the rating of securities listed or offered on a recognized stock exchange, and include clauses (f) of Regulation 9 which provide that credit ratings by a credit rating agency, in accordance with the respective guidelines of a regulator or the financial sector, are the responsibility of the regulatory authority or the financial sector concerned. The board also approved Sebi’s annual report for 2020-2021.

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