Markets regulator, Securities and Exchange Board of India (Sebi), on Tuesday approved a slew of proposals, including revised framework for settlement of cases and new KYC norms for foreign portfolio investors.
The proposals were cleared by the board of Sebi at its meeting in Mumbai.
Sebi chairman Ajay Tyagi said the board has approved new KYC norms for foreign portfolio investors and fresh guidelines would be issued soon.
Here are the key things that Sebi announced today in its meeting in Mumbai.
1: Sebi approved revised Know Your Client (KYC) norms and settlement of cases for foreign portfolio investors (FPIs) and said that new rules guidelines will be issued soon. 2: Sebi did an internal study to review the Total Expense Ratio(TER) of mutual fund schemes and based on the findings, they took following decisions.
i) TER for closed-ended equity oriented schemes shall be a maximum of 1.25 percent, and for other closed-ended schemes will be a maximum 1 percent.
ii) TER for index funds and exchange traded funds will be up to 1 percent.
iii) In Fund of Funds (FoFs), the TER will be a maximum of twice of the TER of underlying funds.
iv) For FoFs investing in liquid, index and ETF schemes, the maximum total TER will be 1 percent.
v) For FoFs investing in active underlying schemes, the maximum total TER will be 2.25 percent for equity oriented schemes and 2 percent for other schemes.
3: Sebi approved the use of Unified Payment Interface (UPI) with facility of blocking, as a new payment mechanism for retail investor applications submitted through intermediaries. This will reduce the time period for listing of issues. 4: Sebi approved the amendments to its equity delisting regulations
i) In case of voluntary delisting, if the price discovered through the reverse book building process is not accepted by the promoters, a counter offer can be given by the promoters. However, the price through the counter offer should not be less than the book value and delisting will be successful only if such counter offer is accepted by such number of public shareholders that the post offer promoter shareholding reaches at least 90 percent.
ii) The board has also approved certain amendments, pursuant to a review carried out by an external expert, PK Malhotra, former member Securities Appellate Tribunal and former secretary, ministry of law and justice.
iv) The promoters of compulsorily delisted companies have to provide exit to the public shareholders within 3 months.
5: The board also approved the amendments to Sebi's prohibition of unfair and fraudulent trade.
i) Expanding the scope of regulations to include employees and intermediary agents
ii) Fraud now includes activities like misleading information on digital media, front running by intermediaries, misselling of securities or related services, mis-utilisation of client account, diversion of client funds and manipulating benchmark price of securities.
iii) Bringing further clarity on sharing of unpublished price sensitive information for due diligence or legitimate purposes.
6: Sebi said that there is no conclusion on the market trading hours. 7: For FPI registration, a common application form has been brought in which would increase the ease of business for FPIs. 8: Sebi constituted a committee to re-look the consent mechanism and it has introduced confidentiality clause for the consent mechanism.
The salient features of the regulations are as follows:
Board may not settle any proceeding if it thinks that the alleged default has wide impact on the market, loss to investors or affects the integrity of the market.
ii) If the applicant is a wilful defaulter, a fugitive economic offender or has defaulted in payment of any fees due, then the board may not settle its proceedings.
iii) In the event of a settlement order being revoked on account of non-compliance with the terms of the order or not making full and true disclosures, the settlement amount paid shall not be refunded to the applicant.
9: Eligible foreign entities(EFEs) will now be allowed to deal in all commodities derivatives traded on Indian exchanges except those classified as sensitive ones. 10: The Board approved the amendments to the SECC Regulations, 2012 to enable interoperability among clearing corporations (CCPs), based on the recommendations of the Secondary Market Advisory Committee. 11: The Board noted that the IT roadmap will facilitate Sebi to deploy its IT resources and funds in a well-planned manner. The consolidation of IT infrastructure will usher in synergy between various IT assets within the organisation. 12: Sebi approved the amendments to Schedule V to insert the following disclosure requirement with respect to complaints under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. 13: Sebi also imposed restrictions on the fugitive economic offenders(FEOs) by not allowing them to raise capital through initial public offers (IPOs) on main board, rights issue, further public offers, preferential issue, qualified institutional placement, IPO of Indian Depository Receipts (IDRs), Rights issue of IDRs.