SEBI board meeting: several key decisions taken
Published: Apr 27, 2017
By TIOLCORP News Service
MUMBAI, APR 27, 2017: THE Securities and Exchange Board of India (SEBI) Board met in Mumbai yesterday and took several key decisions. With an objective to channelize households' savings into capital market and to promote digitalization in mutual funds, SEBI Board after deliberation has decided to allow use of Instant Access Facility (IAF) in Mutual Funds and use of e-wallet for investment in Mutual Funds.
Approval was also granted for for inclusion of systemically important NBFCs registered with RBI having a net worth of more than Rs. 500 crore in the category of QIBs. As NBFCs are well regulated entities, classifying such NBFCs under the definition of QIBs will give Issuers access to a larger pool of funds.
It was also taken note that presently, SEBI (ICDR) Regulations prohibit the issuer from making preferential issue to any person who has sold any equity shares of the issuer during the six months preceding the relevant date. However, in order to carry out actions for recovery from a borrower which may be a listed Company, Banks or Financial Institutions need to sell equity shares of the issuer during the preceding six months of the relevant date. Such Banks/Financial Institutions may also be one of the allottees of the specified securities of the company pursuant to CDR approved scheme under preferential issue route. Accordingly, the Board considered and approved the proposal for extending such relaxation to the Scheduled Banks and Public Financial Institutions as is already being extended to Mutual Funds and Insurance Companies.
The Board also approved the proposal to make amendments to Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2012 and SEBI (Debenture Trustee) Regulations, 1993 . Amendment to The SEBI (Foreign Portfolio Investor) Regulations, 2014 has also been approved whereby an express provision shall be inserted in the regulations to prevent Resident Indians/NRIs or the entities which are beneficially owned by Resident Indians/NRIs from subscribing to Offshore Derivative Instruments.
SEBI Board also considered and approved certain proposals to further strengthen the monitoring of issue proceeds raised in IPOs/FPOs/Rights Issues and for consolidation and re-issuance of debt securities, one of the ways to increase liquidity in the secondary market.
Consequent to merger of FMC with SEBI, commodity derivatives brokers are also being regulated by SEBI. However, as per extant Securities Contracts (Regulation) Rules, 1957 (SCR Rules) and SEBI (Stock Brokers and Sub-brokers) Regulations, 1992 (Stock Brokers Regulations), a stock broker / clearing member dealing in commodity derivatives cannot deal in other securities or vice versa, except by setting up of a separate entity. In this regard, the Board approved the proposal to remove this restriction by amending Stock Brokers Regulations and also to recommend to Government of India for amending SCR Rules accordingly.
