SEBI Board Meet: Regulator unveils a slew of reform measures

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Published: March 2, 2019 2:32:00 AM

Sebi said open offer requirements for corporate debt restructuring will now be restricted to scheduled commercial banks and all-India financial institutions.

SEBI, Capital markets, india stock market, stock market, shares market, indian market, shares market, Securities market, india bourses, risk management, market risk, surveillance systemsThe Sebi board also decided to increase the leverage limit for InvITs from existing 49% to 70% of InvIT assets.

The Securities and Exchange Board of India (Sebi) on Friday made several amendments to its regulations during the meeting which was held in New Delhi. The regulator has approved lowering of fees charged from brokers, stock exchanges and companies seeking to get listed. In addition, the board has approved granting permanent registration to custodians instead of periodical renewal every three years.
It has enabled participation of mutual funds and portfolio management services (PMS) in the commodity derivatives market. “This approval is a positive and a significant step from the regulator. Moreover, this will provide the Indian investors easy access to a new asset class and cater to their diversified investment and trading needs,” said Mrugank Paranjape, MD & CEO at Multi Commodity Exchange (MCX).

In order to secure interests of debenture holders and to enable debenture trustees (DTs) to perform their duties effectively, Sebi has decide to increase the minimum net worth requirement of a DT from existing `2 crore to `10 crore. Now it is also not compulsory to call for a meeting of debenture holders in the event of default in payment obligation by issuer in case of public issue of debt securities.
The regulator has reduced the time frame from existing 60 days to 30 days for residual maturity limit for amortisation-based valuation by mutual funds. The valuation agencies appointed by the Association of Mutual Funds in India (Amfi) may provide valuation of money market and debt securities rated below investment grade.

“As asset management companies are responsible for fair valuation, they may deviate from the valuation provided by valuation agencies subject to recording of detailed rationale for such deviations, appropriate reporting to the board of AMC and trustees and appropriate disclosures to investors,” Sebi said in a press release.

To make it easier for new-age start-ups to get listed in stock market and raise funds, the Sebi also approved a new set of norms to help investors get accredited for investments in such entities. The investor will make an application to the stock exchanges or depositories in the manner prescribed by them for recognition as an accredited investors (AI) for the purpose of the Innovators Growth Platform (IGP).
On the proposal regarding REITs and InVITs, Sebi has decided that the minimum allotment and trading lot for publicly issued InvITs and REITs shall be made in the multiples of a lot, each consisting of 100 units. Value of such allotment lot for InvITs shall be `1 lakh and for REITs `50,000. The Sebi board also decided to increase the leverage limit for InvITs from existing 49% to 70% of InvIT assets. The minimum investment by an investor shall not be less than `1 crore.

Sebi said open offer requirements for corporate debt restructuring will now be restricted to scheduled commercial banks and all-India financial institutions.

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