Even as the board of market regulator Securities and Exchange Board of India (Sebi) is slated to meet on Jun 18, It is learnt that a number of changes may be on anvil.
More power to Sebi
The Sebi board will be restructured and representatives of the Reserve Bank of India and the Ministry of Corporate Affairs may be dropped — the restructured board will also have a secretary, sources said.
The regulator has proposed to dispense with registration of sub-brokers, and would be vested with powers a Civil Court for inquiry.
Sebi’s power to attach bank account will be extended by three months, sources added.
As part of sweeping changes of power with which Sebi can now act, the regulator will free voting powers on shares acquired illegally, cancel illegally allotted securities and can debar a person from serving in the securities market.
The agenda on the June 18 meeting also seeks for powers for Sebi to pass cease-and-desist orders in case of takeover violations, get call records from telecom operators and to direct any person to disgorge unfair gains.
Changes in disclosure norms
Sebi has proposed a new set of ‘Issue of Capital and Disclosure Requirements' (ICDR) Regulations,. The new regulation, ICDR, would replace the Sebi (Disclosure and Investor Protection) Guidelines, 2000, sources said.
The ICDR, sources said, would have a framework for equity issues and convertible instruments and will have modified provisions of existing DIP guidelines and would also contain the relevant recommendations from the Malegam Committee report.
The initial DIP guidelines were issued in 1992 and were updated in 2000 and comprise of 17 chapters, 30 schedules and 370 pages. The proposed ICDR regulations are based on DIP guidelines as of May 31, 2009, sources said, adding that Sebi was also looking to regulate capital issues via Section 11A (1) of the Sebi Act rather than DIP
Fee for intermediaries to be cut
Sources say Sebi has recommended a fee cut for intermediaries and that it may cut fees for FII registration, FII sub-account registration, sale and purchase of securities and debt securities, derivative segment trading and registration for foreign venture capitalists by as much as half.
Sebi has also proposed to review its primary market policy, sources say. As part of the recommendation, unlisted companies going public must list on one nationwide stock exchange. GDRs/ADRs held for over one year, the regulator has proposed, would be eligible for 'Offer for Sale'.
Other changes
Sebi has also proposed changes to securities laws and many acts including The Sebi Act, 1992, The SEC (Registration) Act, 1956, and The Depositories Act, 1996 will be amended. The retirement age for members of the Securities Appellate Tribunal (SAT) would be hiked to 62 years from the existing 62 years — the SAT may also be renamed Financial Services Appellate Tribunal
Here are the other changes that Sebi has recommended:
- Rationalisation of disclosure norms for rights issue
- ‘Summary of industry and business’, ‘Promise vs performance’ disclosures to be dropped
- Major disclosures retained with modifications including funds deployment
- Risk factors and outstanding litigations disclosures retained
- Reduction in rights issue process time, protection of existing investors priority
- Management discussion, analysis post last balance sheet may not be required
More power to Sebi
The Sebi board will be restructured and representatives of the Reserve Bank of India and the Ministry of Corporate Affairs may be dropped — the restructured board will also have a secretary, sources said.
The regulator has proposed to dispense with registration of sub-brokers, and would be vested with powers a Civil Court for inquiry.
Sebi’s power to attach bank account will be extended by three months, sources added.
As part of sweeping changes of power with which Sebi can now act, the regulator will free voting powers on shares acquired illegally, cancel illegally allotted securities and can debar a person from serving in the securities market.
The agenda on the June 18 meeting also seeks for powers for Sebi to pass cease-and-desist orders in case of takeover violations, get call records from telecom operators and to direct any person to disgorge unfair gains.
Changes in disclosure norms
Sebi has proposed a new set of ‘Issue of Capital and Disclosure Requirements' (ICDR) Regulations,. The new regulation, ICDR, would replace the Sebi (Disclosure and Investor Protection) Guidelines, 2000, sources said.
The ICDR, sources said, would have a framework for equity issues and convertible instruments and will have modified provisions of existing DIP guidelines and would also contain the relevant recommendations from the Malegam Committee report.
The initial DIP guidelines were issued in 1992 and were updated in 2000 and comprise of 17 chapters, 30 schedules and 370 pages. The proposed ICDR regulations are based on DIP guidelines as of May 31, 2009, sources said, adding that Sebi was also looking to regulate capital issues via Section 11A (1) of the Sebi Act rather than DIP
Fee for intermediaries to be cut
Sources say Sebi has recommended a fee cut for intermediaries and that it may cut fees for FII registration, FII sub-account registration, sale and purchase of securities and debt securities, derivative segment trading and registration for foreign venture capitalists by as much as half.
Sebi has also proposed to review its primary market policy, sources say. As part of the recommendation, unlisted companies going public must list on one nationwide stock exchange. GDRs/ADRs held for over one year, the regulator has proposed, would be eligible for 'Offer for Sale'.
Other changes
Sebi has also proposed changes to securities laws and many acts including The Sebi Act, 1992, The SEC (Registration) Act, 1956, and The Depositories Act, 1996 will be amended. The retirement age for members of the Securities Appellate Tribunal (SAT) would be hiked to 62 years from the existing 62 years — the SAT may also be renamed Financial Services Appellate Tribunal
Here are the other changes that Sebi has recommended:
- Rationalisation of disclosure norms for rights issue
- ‘Summary of industry and business’, ‘Promise vs performance’ disclosures to be dropped
- Major disclosures retained with modifications including funds deployment
- Risk factors and outstanding litigations disclosures retained
- Reduction in rights issue process time, protection of existing investors priority
- Management discussion, analysis post last balance sheet may not be required
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