Mumbai: The capital markets regulator Sebi Thursday approved a new framework for issuance of differential voting right (DVR) shares from July and banned mutual funds from entering into standstill agreements with any companies.
Sebi chairman Ajay Tyagi told reports after a board meeting that it has been decided to ban mutual funds from entering into standstill pacts with companies apart from making them hold at least 20% assets of liquid funds in cash equivalents.
Under the new framework a tech company having superior voting rights shares (SR shares) will be permitted to do an initial public offering of only ordinary shares to be listed on the main board, adding, the new framework is applicable only for tech companies, which Sebi defines as per its 'innovators growth platform' norms, as those which intensively use technology, information technology, intellectual property, data analytics, bio-technology or nano-technology to provide products, services or business platforms with substantial value addition. There is also a cap on the sectoral limit in liquid funds at 20%. If royalty is more than 5% than required, it would require shareholder nod.
Besides DVR, the regulator also discussed in-principal approval for changes in the method of calculation of net asset value, with a view to tackle the problem of concentration of asset under management with just 10 asset management companies and increasing the scope of the definition of encumbrance. The board also approved guidelines for share pledging.
On the increase in cases of promoters pledging shares to raise funds, which has recently caused wild movements in scrip of companies like Emami and Apollo Hospitals, the regulator decided, "Promoters shall be required to disclose separately detailed reasons for encumbrance whenever the combined encumbrance by the promoters and persons acting in concert crosses 20% of the total share capital in the company or 50% of their shareholding in the company."
