The Securities Exchange Board of India (SEBI) approved and passed a host of amendments to tighten various regulations. The decisions were taken during the board meeting of the regulatory authority. Some of the newer provisions include changes in the lock-in period for anchor inventors, new rules for IPO proceeds utilisation, capital and disclosure requirements, among others.
“The Board approved the proposal to amend various aspects of regulatory framework under the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 (ICDR Regulations) and consequential amendment to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as applicable, based on the public consultation process on the proposals recommended by Primary Market Advisory Committee (PMAC),” read the statement from SEBI.
Under the new rules, the lock-in period of anchor investors has now been extended to 90 days from the date of allotment. At the same time, the lock-in period for preferential issue has been halved for both promoters and non-promoters.
SEBI also stated that the appointment or reappointment of any person as director of a company, including as whole-time director or managing director or manager, after they have failed to get elected, can now happen only with the prior approval of shareholders.
The regulatory body has now also cleared mutual funds to follow Indian Accounting Standard (IND AS) from financial year 2023-24, while also removing redundant provisions and enhancing clarity in existing regulations. Amendments to regulations that govern alternate investment funds, and foreign portfolio investors have also been made.
Finally, SEBI also tightened the rules on how companies can use their IPO proceeds.
“Where the issuer company in its offer documents, set out an object for future inorganic growth but has not identified any acquisition or investment target, the amount for such objects and amount for general corporate purpose (GCP) shall not exceed 35 percent of the total amount being raised,” stated the body.