 "Five capital market changes since the last economic survey")
The Economic Survey has pointed out key policy initiatives for the capital market since the last survey. The top five are given below:
* The government moved the Securities Laws (Amendment) Act 2014 to strengthen the stock market regulator.
“Vide the Act passed in August 2014 enhanced powers were conferred upon SEBI, including explicit power to disgorge ill-gotten gains, power to conduct search and seizure, explicit powers for settlement, attachment and recovery, increase in penalties, and constitution of special courts,” it said.
* The foreign investor regulations were also overhauled with the SEBI (Foreign Portfolio Investors) Regulations 2014 which became effective in June.
This consolidated the various categories of foreign investors into three main ones, based on the degree of transparency and origin of funds. Government entities such as sovereign wealth funds were placed in category one, regulated entities like foreign mutual funds were placed in category two; and all others were a part of third category of FPIs. These foreign investors were also allowed to invest in currency derivatives.
* Greater parity between private and listed public companies
The regulations were also amended to require even government companies to sell at least 25 per cent of their shares to the public if they wanted to remain listed, in line with other private companies. Earlier this was 10 per cent for government companies.
* Governance norms made more stringent
“SEBI amended Clause 49 of the equity listing agreement with provisions such as exclusion of nominee director from the definition of independent director and compulsory whistle blower mechanism,” it said.
* Regulations to cover research analysts, real estate investment trusts and uniform KYC
The regulator also introduced regulations for research analysts and real estate and infrastructure investment trusts. Sebi moved on the uniform Know Your Customer regulations which could allow investors to make use of various financial services without having to repeatedly go through the KYC process.
* The government moved the Securities Laws (Amendment) Act 2014 to strengthen the stock market regulator.
“Vide the Act passed in August 2014 enhanced powers were conferred upon SEBI, including explicit power to disgorge ill-gotten gains, power to conduct search and seizure, explicit powers for settlement, attachment and recovery, increase in penalties, and constitution of special courts,” it said.
* The foreign investor regulations were also overhauled with the SEBI (Foreign Portfolio Investors) Regulations 2014 which became effective in June.
This consolidated the various categories of foreign investors into three main ones, based on the degree of transparency and origin of funds. Government entities such as sovereign wealth funds were placed in category one, regulated entities like foreign mutual funds were placed in category two; and all others were a part of third category of FPIs. These foreign investors were also allowed to invest in currency derivatives.
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* Greater parity between private and listed public companies
The regulations were also amended to require even government companies to sell at least 25 per cent of their shares to the public if they wanted to remain listed, in line with other private companies. Earlier this was 10 per cent for government companies.
* Governance norms made more stringent
“SEBI amended Clause 49 of the equity listing agreement with provisions such as exclusion of nominee director from the definition of independent director and compulsory whistle blower mechanism,” it said.
* Regulations to cover research analysts, real estate investment trusts and uniform KYC
The regulator also introduced regulations for research analysts and real estate and infrastructure investment trusts. Sebi moved on the uniform Know Your Customer regulations which could allow investors to make use of various financial services without having to repeatedly go through the KYC process.