The Securities and Exchange Board of India (Sebi) has approved regulations for the issue of non-convertible preference shares, which are expected to help banks meet their capital requirements.
The securities market regulator approved the Sebi (Issue and Listing of Non-Convertible Redeemable Preference Shares) Regulations, 2013, in a board meeting which took place in New Delhi on Friday.
The proposed Regulations provide the framework for public issuance of non-convertible redeemable preference shares and also listing of privately-placed redeemable preference shares.
"Considering the risks involved in the instrument, certain requirements like minimum tenure of the instruments (three years), minimum rating ('AA-' or equivalent) etc. have been specified in case of public issuances," according to a press release put up on the Sebi website.
Additionally, it has put a minimum application size for each investor - Rs 10 lakh for the listing of privately-placed non-convertible redeemable preference shares.
According to Basel III norms, banks can issue non-equity instruments such as perpetual non-cumulative preference shares and innovative perpetual debt instruments, which are in compliance with the specified criteria for inclusion in additional Tier I capital.
"The proposed Regula-tions shall….be applicable to….instruments issued by banks, subject to compliance with the provisions of Companies Act, 1956 or/and any other applicable laws and such other conditions that may be specified by Sebi…" said the statement.
Sebi also decided to amend the regulations for stock brokers so that there may be one certificate of registration per stock exchange for a stock broker.
Earlier, they had to get a separate certificate of registration for every segment such as equity, equity derivatives, currency derivatives and also for each category, like trading member, trading-cum-self clearing member and a professional clearing member.
Sebi also extended the initial offering period for the Rajiv Gandhi Equity Savings Scheme(RGESS) from 15 days to 30. The timeline for refund of money and sending statement of accounts has been extended from five working days to 15 days from the closure of initial subscription for RGESS-eligible schemes.
The Board also approved the Sebi budget for 2013-14 and the opening of six more local offices at Ranchi, Raipur, Panaji, Shimla, Dehradun and Srinagar.
