New Delhi: Securities market regulator SEBI on Friday announced a slew of measures after Finance Minister Arun Jaitley addressed the board members and senior officials. SEBI approved changes in its norms for open offer exemptions for corporates facing debt restructuring and also for debt instrument valuation by mutual funds to make these processes fairer. It also approved easing of norms for raising of funds through instruments like real estate and infrastructure investment trusts.
The regulator will amend its norms for valuation of money market and debt securities by mutual funds to make the process fairer and uniform across the industry to safeguard investors in the wake of IL&FS led NBFC crisis and other defaults. The proposal seeks to make the valuation practices more reflective of the realizable value of money market and debt securities with residual maturity up to 60 days. Accordingly, the residual maturity limit for amortisation based valuation by mutual funds will be reduced from 60 days to 30 days. The threshold maintained between reference price and valuation price would be plus or minus 0.025 per cent, while the reference price will be taken as security level price given by the valuation agencies.
The board also approved a proposal to bring uniformity and consistency across the mutual fund industry on valuation of money market and debt securities rated below investment grade. The valuation agencies appointed by AMFI will provide valuation of money market and debt securities rated below investment grade, the regulator added. As the Asset Management Companies are responsible for fair valuation, they may deviate from the valuation provided by the valuation agencies subject to recording of detailed rationale for such deviations, appropriate reporting to the Board of AMC and Trustees and appropriate disclosures to investors, it noted. On the changes in norms relating to corporate debt restructuring, SEBI said exemptions from applicability of conditions for preferential issue and from the obligation of making an open offer will be restricted to all scheduled commercial banks (excluding Regional Rural Banks) and all India Financial Institutions for acquisitions in their ordinary course of business.
To provide a boost for startups seeking to get listed, SEBI has approved easing of norms for accreditation of investors willing to invest in such new-age entities. A framework for the process of accreditation of investors for Innovators Growth Platform, which will be the name of the stock exchange platform where new-age startups would be listed. Under this framework, the investor having a demat account will make an application to the stock exchanges or depositories to be recognised as an ‘accredited investor (AI)’. The exchanges and depositories will grant accreditation to these investors for a period of three years, after ascertaining their eligibility. While detailed eligibility and other norms for AIs would be notified by SEBI later. Lowering of fees for brokers, exchanges
At the same time SEBI approved lowering of fees charged from brokers, stock exchanges and the companies seeking to get listed. A reduction in fees payable by brokers by 33.33 per cent from Rs 15 per crore of transactions to Rs 10, while the same for agri-commodity derivative transactions would be reduced sharply by 93.33% from Rs 15 to Re 1.
The regulator has barred Commex Technology and two of its former directors from the capital markets in a matter related to manipulation in issuance of a global depository receipts (GDR). While Commex has been barred for five years and its former directors Adi Cooper and Kishore Hegde for two years, as per the order dated February 28. The regulator after conducting a probe found that the firm issued 1.91 million GDRs worth USD 9.99 million on May 25, 2009, on the Luxembourg Stock Exchange.
In another case, Chairperson of KEI Industries along with six present and former directors have settled a GDR manipulation case with Sebi by paying a total of Rs 4.6 crore towards settlement charges. On September 16, 2005, KEI had issued 2.173 million GDRs (Global Depository Receipts) amounting to USD 10 million. The regulator had initiated adjudication proceedings against the seven directors and sent a notice in June 2017.