The Securities and Exchange Board of India (SEBI) on Thursday announced multiple reforms. Delisting procedures are streamlined, with companies gaining the option of a fixed-price buyback at a 15% premium for delisting alongside the existing process. Additionally, the minimum public shareholding requirement for delisting via counter-offer has been reduced.
To combat misleading financial advice, SEBI restricted registered entities from associating with individuals promoting stocks or promising guaranteed returns. Educational content creation by influencers remains allowed.
SEBI also revised the selection criteria for stocks in the F&O segment to ensure increased liquidity. This may lead to a minor net addition and removal of some stocks.
Further reforms include simplified debt and preference share issuance, reduced trading lot sizes for privately placed InvITs, and mandatory independent performance evaluations for stock exchanges. SEBI relaxed penalties for technical glitches faced by Market Infrastructure Institutions.
The reforms also address Alternative Investment Funds (AIFs), limiting extensions of Large Value Funds (LVF) tenure to five years with investor approval and permitting borrowing for meeting temporary shortfall in drawdown from investors. Finally, data localization and stricter cybersecurity measures are mandated for all regulated entities. These reforms aim to create a more transparent, efficient, and investor-friendly capital market in India.
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