The Securities and Exchange Board of India (Sebi) on Tuesday overhauled norms pertaining for appointment, removal and remuneration of independent directors (ID) in order to reduce the sway of promoters on them.
The regulator also reduced the minimum application amount for REITs and InvITs to Rs 10,000-15,000, from Rs 55,000 at present, aligning them with equity IPOs.
Sebi increased the minimum amount asset management companies (AMCs) have to put in their new fund offerings (NFO) to ensure more skin-in-the-game.
Other key decisions taken by Sebi include allowing banks, other than scheduled commercial banks, to act as investment bankers. To crackdown on insider trading, Sebi increased the reward under the informant mechanism 10-fold to Rs 10 crore.
The regulator also introduced the concept of accredited investors to provide greater flexibility to high networth individuals and professional investors.
Sebi also merged the merger of the Issue and Listing of Debt Securities Regulations, 2008 and Non-Convertible Redeemable Preference Shares) Regulations, 2013 into a single Regulation known as Issue and Listing of Non-Convertible Securities Regulations, 2021 in a bid to deepen the bond market.
“On independent directors, some of the amendments proposed in the consultation paper earlier this year have been done away with, such as the dual approval requirement. The nudge to the ministry of corporate affairs to relook at compensation flexibility including ESOPs, is much needed and very welcome,” said Shruti Rajan, Partner, Trilegal.
What Sebi decided:
Framework governing independent directors overhauled
Minimum investment ticket size for REITs and InvITs lowered sharply
Fund houses asked to invest more in their NFOs depending on risk level
Banks other than scheduled banks also allowed to act as investment bankers
Reward for informants raised from Rs 1 crore to Rs 10 crore to curb insider trading
Concept of accredited investors; new regulation to deepen the debt market
Rules for Indian fund managers to act as FPIs streamlined
Dear Reader,
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.
Digital Editor
RECOMMENDED FOR YOU