SEBI Board Meeting Under New Chair: Conflict of Interest Disclosures, Eased FPI Norms, And More Key Takeaways

The market regulator, the Securities and Exchange Board of India, on Monday came out with multiple reforms that include forming a high-level panel for conflict of interest disclosures by its board members, easing disclosure norms for foreign portfolio investors, extending the fee collection period for research analysts to one year, and more. 

As reported exclusively by NDTV Profit yesterday, the regulator has decided to form a high-level committee to review provisions related to conflict of interest, disclosures, and related matters concerning its board members and officials. The decision was made during SEBI’s first board meeting under its new chairperson, Tuhin Kanta Pandey.

Coming onto other developments, on Jan. 10 this year, SEBI suggested increasing the threshold for compulsory disclosures by foreign portfolio investors from Rs 25,000 crore to Rs 50,000 crore. This was proposed due to increased market liquidity and has now been approved by the SEBI board.

Furthermore, on Feb. 12, SEBI proposed to allow investment advisors and research analysts to charge advances from their clients for a period not exceeding one year. This was aimed at dealing with the liquidity issues that the professionals might face and has now been approved.

Apart from this, in the spirit of doing business, the regulator has not approved that debt securities that are rated 'A' or below will now be the same as unlisted investments. This would help AIFs meet the compliance obligations easily.

The Board reviewed the appointment process of Public Interest Directors (PIDs) on the governing boards of MIIs, ensuring uniformity in cooling-off periods for PIDs and Key Management Personnel (KMPs) transitioning between MIIs.

Additionally, the appointment processes for key roles such as compliance officer, chief risk officer, chief technology officer, and chief information security officer were reviewed to prioritise technology resilience, market integrity, and compliance over commercial considerations.

The Board deferred the implementation of amendments to regulations for merchant bankers, debenture trustees, and custodians. Previously, the Board had approved allowing them to undertake other regulated activities as separate legal entities after registration. However, revised proposals will be considered in the future after internal consultations.