Initiates public consultation process on allowing electronic platform for primary debt offerings
Stock market regulator Securities and Exchange Board of India (Sebi) has announced that it will facilitate the listing of stock exchanges by placing certain safeguards and procedures with respect to shareholding norms, fit and proper criteria and other issues of conflict of interest thereby ensuring compliance with ownership and governance norms for a listed stock exchange. With a view to ensure that every shareholder be Fit & Proper, each applicant will be required to make declaration to this effect at the time of making application during IPO/OFS of a stock exchange. Sebi will in due course issue necessary procedures to ensure continued compliance of the provisions post listing of a stock exchange. Similar measures will apply with respect to the listing of a Depository.
The Sebi board at its meeting held in Mumbai yesterday, 30 November 2015, also approved a proposal to initiate public consultation process regarding providing exit opportunity to dissenting shareholders under Companies Act, 2013 in case of change in objects or varying the term of contracts referred to in the prospectus.
Sebi has also decided to initiate public consultation process on introduction of electronic platform for primary market debt offering through private placement. The use of the electronic platform could result in improvement in efficiency and transparency of the price discovery mechanism and possible reduction of cost and time taken for such issuances. The electronic book may be created by entities to be named as Electronic Book Providers (EBPs). Entities such as stock exchanges, depositories and merchant bankers with net worth above Rs 100 crore will be eligible for applying as EBPs. In another decision, the Sebi board has approved a proposal to initiate public consultation process for revival of public issuance of convertible securities by listed entities.
The Sebi board has approved the proposal to amend SEBI (SAST) Regulations, 2011 for providing general exemption from open offer obligations arising due to passive increase in voting rights as a result of expiry of call notice period and forfeiture of shares.
The Sebi board has accepted some of recommendation of the Committee on Clearing Corporations headed by K.V. Kamath. The stock market regulator in due course will look into allowing interoperability between different Clearing Corporations (CCs). It was decided that a stock exchange need not transfer 25% of its profit to core Settlement Guarantee Fund (SGF) of CC considering the sufficient availability of SGF. It has also been decided to allow liquid schemes of debt mutual funds as eligible investment by recognized CCs, subject to certain conditions. It has also been decided that the depositories should transfer 5% of profit from depository operations to their Investor Protection Fund.
The Sebi board also approved a proposal for initiation of public consultation process for disclosure requirements for issuance and listing of Green Bonds, which are in line with the requirements as provided in Green Bond Principles as recommended by International Capital Market Association (ICMA).
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The Sebi board has extended the applicability of Business Responsibility Reporting (BRR) in annual report to top five hundred listed entities based on market capitalization as on 31 March every year. At present BRR is applicable for top 100 listed entities based on market capitalization. The key principles which are required to be reported under BRR include the areas such as environment, social, governance, stakeholder's relationships, etc.
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