Securities and Exchange Board of India (SEBI) in its Board meeting PR No. 70/2015 held on dated 22nd March, 2015 has proposed the following changes:-
|Particulars||Existing Provisions||Proposed Changes|
|Guideline for IFSC(International Financial Services Centres)||-Not Defined-||♥ SEBI has approved SEBI (International Financial Services Centres) Guidelines, 2015.
♥ As per this guidelines, Indian as well as foreign stock exchanges, clearing corporations and depositories are permitted to set up subsidiaries to undertake the same business in IFSC subject to certain relaxed norms on shareholding and net worth, etc
♥ SEBI registered intermediaries or recognized intermediaries of foreign jurisdiction are permitted to operate as securities market intermediaries in IFSC through a subsidiary or joint venture company.
♥ The guidelines, inter alia, permits issue of DR and debt securities in IFSC by domestic as well as foreign companies subject to the Foreign Currency Depository Receipts Scheme, 2014 and relevant SEBI (ICDR) Regulations.
♥ The guidelines also provide for listing and trading of equity shares issued by companies incorporated outside India, depository receipts, debt securities, currency and interest rate derivatives, index based derivatives and such other securities as may be specified by SEBI from time to time.
♥ Mutual Funds and Alternative Investment Funds set up in IFSC can invest in securities listed in IFSC, securities issued by companies incorporated in IFSC and securities issued by foreign issuers.
♥ All Institutions in IFSC will comply with the IOSCO principles and Principles for Financial Market Infrastructures (FMIs) and such other governance norms specified by SEBI.
IOSCO The International Organization of Securities Commissions is an association of organizations that regulate the world’s securities and futures markets.
Members are typically the Securities Commission or the main financial regulator from each country.
The organization’s role is to assist its members to promote high standards of regulation and act as a forum for national regulators to cooperate with each other and other international organizations.
PRINCIPLES FOR FINANCIAL MARKET INFRASTRUCTURES (FMIS)
It is designed to ensure that the infrastructure supporting global financial markets “is even more robust and thus even better placed to withstand financial shocks at the present”.
These principles will apply to all systemically important payment systems, central counterparties and trade repositories (collectively FMIs).
|Conversion of Debt into Equity by Banks & FI’s||Under Reg. 3 of SEBI (SAST) Regulation 2011, on crossing the threshold limit of 25% or more, Acquirer shall issue an open offer.|| ♥ The Board has approved to relax the applicability of certain provisions of the SEBI (ICDR) Regulations & SEBI (SAST) Regulation for listed borrower companies in distress by the lending Institutions.
♥ Such relaxation in terms of pricing will be subject to the allotment price being as per a fair price formula prescribed and not being less than the face value of shares. Other requirements would be available if conversions are undertaken as part of the proposed Strategic Debt Restructuring (SDR) scheme of RBI
|Continuous Disclosure Requirements for Listed Entities||Proposed SEBI (Listing Obligations and Disclosure Requirements) Regulations provided for§ Disclosure of outcome of BM shall be made within 15 minutes of the closure.||The following changes to the proposed SEBI (Listing Obligations and Disclosure Requirements) Regulations
♥ Disclosure of all events/information, first to stock exchange(s) at not later than 24 hours of occurrence of event/information.
♥ Updation of disclosure on material developments shall also be made on a regular basis.
♥ Disclosure of outcome of BM shall be made within 30 minutes of the closure of the meeting.
♥ Disclose on its website all events/information, also with respect to subsidiaries which is material and such information shall be hosted for a minimum period of 5 years.
♥ Specific and adequate reply to queries of SE with respect to rumours and may on its own initiative also.
♥ The Board shall frame a policy for determination of materiality, which shall be disclosed on its website.
♥ SEBI to specify an indicative list of information which may be disclosed upon occurrence of an event.
|SEBI (Mutual Fund) Regulations, 1996||A fund manager who is managing a domestic scheme, is allowed to manage an offshore fund, only if,
1. The investment objective and asset allocation of the domestic scheme and the offshore fund are same
2. Atleast seventy percent of the portfolio is replicated across both the domestic scheme and the offshore fund, and
3. The offshore fund should be broad based.
i.e there should be at least 20 investors with no single investor holding more than 25 percent of corpus of the fund, etc. Otherwise, a separate fund manager is required to be appointed for managing an offshore fund.
|SEBI Decided to remove the restrictions for managing Offshore Funds belonging to Category-I FPIs and appropriately regulated broad based
Category II FPIs, by local fund manager who is managing a domestic scheme.
Category-I includes: foreign investors related with the government such as central banks, government agencies, sovereign wealth funds.
Category II includes:
Regulated entities like banks, assets management companies, investment managers etc. and broad-based funds, which may be regulated such as mutual funds, investment trusts etc. or non-regulated.
|SEBI (Issue and Listing of Debt Securities by Municipality) Regulations, 2015||-Not Defined-||SEBI Approved the SEBI (Issue and Listing of Debt Securities by Municipality) Regulations, 2015
♥ In line with the Government of India guidelines for issue of tax-free bonds by Municipalities.
♥ An issuer making a public issue shall only issue revenue bonds while in case of private placements, general obligation bonds or revenue bonds.
♥ Issuer’s contribution for each project shall not be less than 20 per cent of the project costs.
♥ Mandatory credit rating.
♥ Minimum Tenure of 3 years.
♥ Should not have default in repayment of debt securities or loan during the previous 365 days.
♥ Should not have had negative net worth in any of the last 3 preceding financial years.
♥ Banks or FI will be appointed as monetary agencies and will prepare periodic reports.
(Author can be reached at email@example.com)