Sebi may ease FPI norms
The Securities and Exchange Board of India (Sebi) is mulling easing access norms for investment by foreign portfolio investors (FPIs) and bringing a new framework to strengthen the governance structure for mutual funds (MFs), senior officials have said.Also, Sebi has plans to review the framework for credit rating agencies (CRA), as it seeks to check the menace of ´rating shopping´ and ´pick and choose´ approach in their actions.
Further, the regulator is looking at providing an additional method for listed entities to achieve the minimum public shareholding requirements.These issues would be taken up at the Sebi board meeting schedule for Thursday, senior officials sai
With regard to FPIs, the markets watchdog may consider simplifying regulatory requirements pertaining to access norms, withaview to easing direct registration for overseas investors.The regulator will review the norms for CRA on the basis of public comments.It had come out with a consultation paper in this regard in September.
According to the proposal, no CRA should “directly or indirectly hold more than 10 per cent of shareholding and/ or voting rights in another CRA and shall not have representation on the board of the other CRA”.
The minimum net worth threshold for the rating agencies has been proposed to be raised to Rs 50 crore from the current level of Rs 5 crore. In addition, Sebi is considering to revisit its directive on ´loan default disclosure´, which will make it mandatory for listed companies to inform stock exchanges about such issues as soon as they occur.
Earlier, Sebi had put off implementation of its directive “until further notice” that required listed firms to inform exchanges if they default on loan payments to banks and financial institutions, justaday before it was supposed to be implemented on October 1.
Sebi may create a full time post of Chief Vigilance Officer.Further, it plans to make amendments to Investment Advisor norms on the basis of consultation paper that was issued in June this year. Also, it is looking to amend regulation with respect to qualified institutional placement.
The Business Standard, New Delhi, 27th December 2017