SEBI's 210th Board Meeting: Here Are Five Key Takeaways
The market regulator conducted its 210th board meeting on Wednesday and several big ticket market reforms were discussed. But what stood out among many were major changes for the Alternative Investment Fund industry, NSEL settlement, benefits for startup founders, delisting reforms for government firms and reforms for merchant banking industry.
Until now, if an investor in an AIF wanted to put additional money into a company that the AIF is investing in, it had to be done outside the AIF structure—typically through the Portfolio Management Services route. But this route has several limitations.
These include PMS regulations restricting investments in unlisted companies, PMS clients having the option to exit early, which may not align with the AIF's timelines and finally, investment managers not being allowed to advise co-investors on listed securities under the current rules.
Hence, to ease this entire process and give better opportunities to investors, the co-investment reform has been brought in.
The markets regulator also allowed a special framework to make it easier for the government to delist PSUs from the stock market when the government already owns at least 90% of the company. This move is for PSUs that are no longer viable due to outdated business models or other government decisions, such as asset sales.
The regulator also approved ease of norms for founders of startups who wish to list their companies. Current norms only allow employees to take the benefits of ESOP issuances. The regulator has now extended this to founders as well but such that they can hold ESOPs until a year before listing.
SEBI has further introduced a scheme for stock brokers who are currently facing regulatory action. It offers them a chance to settle ongoing cases and close them quickly through a fast-track process.
Finally, the regulator has permitted merchant bankers to carry out non-SEBI-regulated activities within the same entity, provided they meet specific conditions laid down by the regulator.
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