SEBI Board Meeting Agenda: Derivative Curbs Not On Table; But Here Are Key Market Reforms On Cards

The Securities and Exchange Board of India's board is set to meet on Friday. While highly placed sources have told NDTV Profit that any discussions on curbing volumes or speculation in the derivatives segment are not on the table for the day, there's much more that the markets can look forward to.

These include changes to minimum public shareholding norms for large companies that wish to go public, review of old stockbroker rules from 1992, relaxed entries into large-value AIF schemes, relief for investment advisors and research analysts, widening scope of credit rating agencies, classifying REITs and InvITs as equity instruments and more.

SEBI has proposed that, for companies with post-issue capital above Rs 50,000 crore but less than or equal to Rs 1 lakh crore, the offer size must be equivalent to Rs 5,000 crore and at least 8% of securities.

If the post-issue capital is above Rs 1 lakh crore but less than or equal to Rs 5 lakh crore, the company would need to offer shares equivalent to Rs 6,250 crore and at least 2.75% of its securities.

Finally, for the largest companies with post-issue capital above Rs 5 lakh crore, the requirement would be shares equivalent to Rs 15,000 crore and at least 1% of securities, subject to a floor ensuring that every company offers at least 2.5% to the public.

Another critical aspect is the timeline to achieve the statutory 25% minimum public shareholding.

For companies in the Rs 1,600 crore to Rs 4,000 crore range, and those above Rs 4,000 crore but below Rs 1 lakh crore, SEBI requires that 25% MPS be achieved within three years of listing.

The proposed amendments extend these timelines considerably for large firms. Companies with public shareholding below 15% at the time of listing will be required to achieve 15% within five years and 25% within 10 years.

Where public shareholding is already above 15% on listing, such companies will need to reach the 25% threshold within five years.

SEBI wants to make it easier for big funds called Large Value Funds (LVFs) to operate.

Right now, anyone investing in such funds has to put in at least Rs 70 crore. SEBI has proposed cutting this minimum to Rs 25 crore. The idea is that if the entry amount is lower, more big Indian institutions like insurance companies will be able to invest, making the investor pool wider.

SEBI also plans to relax some of the rules these funds currently follow.

Other major proposals include smoother regulations for foreign portfolio investors and relaxed requirements for accredited investors investing in alternative investment funds.