 "The logo of the Securities and Exchange Board of India (SEBI), India's market regulator, is seen on the facade of its head office building in Mumbai")
The Securities and Exchange Board of India (Sebi) on Monday cleared the decks for initial public offerings (IPOs) by stock exchanges and depository firms by providing clarity on the listing framework.
It said the combined shareholding of trading members, associates and brokers in a listed exchange cannot exceed 49 per cent. Every shareholder will have to declare their “fit & proper” status at the time of the IPO. The depositories will monitor the investment caps for single entities.
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ACTION-PACKED ANNOUNCEMENTS Some of the decisions taken at the Sebi board meeting: |
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The industry players, however, said they would wait for more clarity.
“We welcome the Sebi move. We will be able to comment once the detailed regulations are published. BSE will try to expedite the listing process, based on the regulations. Listing of exchanges is expected to bring additional transparency to their working,” said a BSE spokesperson.
BSE had proposed to list in 2012 but could not because of the lack of enabling provisions.
The NSE, which recently told its shareholders about its listing plans, said it was examining Sebi’s decision, which was revealed after its board meeting on Monday. More clarity is expected once it issues a circular.
“Most of the measures announced by Sebi were already there in the Stock Exchange and Clearing Corporations (SECC) regulations,” said Sandeep Parekh, the founder of Mumbai-based Finsec Law Advisors.
The Sebi board also approved most of the recommendations of the K V Kamath-led panel on clearing corporations. It said exchanges need not transfer 25 per cent of their profits to a core settlement guarantee fund of clearing corporations. It has allowed the transfer of five per cent of the profit from a depository to an investor protection fund. The regulator has asked companies to provide an exit option to shareholders if the objects of fund raising are changed — a move that is likely to benefit minority shareholders.
For instance, a company raises Rs 100 crore through an IPO to build a factory. Later, it decides to scrap the factory and instead acquires a rival company. It will now have to provide the option of a refund to investors.
In a relief to promoters, Sebi has provided an exemption from open offer if it gets triggered by a passive breach, which includes expiry of the call notice period and the forfeiture of shares.
To give a fillip to the issuance and listing of green bonds the regulator has decided to publish a consultation paper on the disclosure requirements for listing of this green energy focused instruments on domestic exchanges and platforms. The Sebi board also decided to take steps to have all privately placed debt issuances to be done online. To facilitate this move the regulator proposes to create electronic book builders and they would need to have a net worth of Rs 100 crore.
Sebi has also eased the delisting criteria for smaller companies. The market regulator has scarped an earlier condition of no trading for the preceding one year. Sebi has said smaller companies, which have a trading volume of less than 10 per cent of the total number of shares in preceding 12 months, would be eligible under the “simplified procedure of delisting”.
Sebi has expanded the requirement of Business Responsibility Reporting (BRR) to top 500 companies. Currently, only the top 100 companies need to do BRR, which includes information on initiatives impacting environment, social, governance and stakeholders’ relationships.
In a relief to promoters, Sebi has provided an exemption from open offer if it gets triggered by a passive breach, which includes expiry of call notice period and forfeiture of shares.
