Outcome of recent SEBI Board Meeting ; amongst other changes SEBI approves changes to LODR regulations relating to appointment/re-appointment of persons who fail to get elected as directors including whole time directors
The Securities and Exchange Board of India (“SEBI”) has taken certain decisions during their board meeting on 28th December, 2021.
Key Highlights
1. The Board approved the proposal to amend various aspects of regulatory framework under the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 (ICDR Regulations) and consequential amendment to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as applicable, based on the public consultation process on the proposals recommended by Primary Market Advisory Committee (PMAC). Where the issuer company in its offer documents, set out an object for future inorganic growth but has not identified any acquisition or investment target, the amount for such objects and amount for general corporate purpose (GCP) shall not exceed 35% of the total amount being raised.
2. The Board approved a proposal to introduce provisions in the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“LODR Regulations” / “LODR”) relating to appointment or re-appointment of persons who fail to get elected as directors, including as Whole-time directors or Managing Directors or Managers, at the general meeting of a listed entity.
Accordingly, appointment or a re-appointment of any person, including as a managing director or a whole-time director or a manager, who was earlier rejected by the shareholders at a general meeting, shall be done only with the prior approval of the shareholders.
3. The Board approved amendment to Alternate Investment Fund (“AIF”) Regulations, to introduce Special Situation Funds, a sub-category under Category I AIF, which shall invest only in ‘stressed assets’
4. The Board approved amendment to Mutual Fund (“MF”) Regulations to mandate Mutual Funds schemes to follow Indian Accounting Standard (IND AS) from Financial Year 2023-24 onwards. Further, the Board approved amendments to MF Regulations with respect to accounting related regulatory provisions to remove redundant provisions and to bring more clarity. The Board approved amendment to MF Regulations to mandate the Trustees to obtain the consent of the unitholders when the majority of the trustees decide to wind up a scheme or prematurely redeem the units of a close ended scheme. Further, the trustees shall obtain consent of the unitholders by simple majority of the unitholders present and voting on the basis of one vote per unit held and publish the results of voting within 45 days of the publication of notice of circumstances leading to winding up.
5. The Board approved amendments to the SEBI {KYC (Know Your Client) Registration Agency} Regulations, 2011 towards enhancing the role of KYC Registration Agencies (KRAs).
6. The Board approved amendments to the SEBI (Stock Brokers)Regulations, 1992 and SEBI (Depository and Participants) Regulations, 2018, to provide for revised Networth requirement for Trading Members (TMs), Self-Clearing Members (SCMs), Clearing Members (CMs), Professional Clearing Members (PCMs), Depository Participants (DPs) and Deposit & Fees requirement for members in Electronic Gold Receipt (EGR) Segment. Schedule VI has been amended to provide for revised net worth requirement within prescribed timelines for Trading Members (TMs), Self-Clearing Members (SCMs), Clearing Members (CMs) and Professional Clearing Members (PCMs).
The Board has also approved the amendment to SEBI (Depositories and Participants) Regulations, 2018 to provide for revised net worth requirement within prescribed timelines for stock broker depository participant
7. The Board approved the proposal to amend the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 for issuance of securities in dematerialized form in case of investor requests for issue of duplicate shares etc. This move will improve ease, convenience and safety of transactions for investors.
8. The Board considered and approved the amendments to the SEBI (Foreign Portfolio Investors) Regulations, 2019 to enable SEBI to generate unique registration numbers of FPIs on receiving the basic details of the applicants seeking FPI registration from either of SEBI registered Depositories.
9. The Board approved the amendments to the Securities and Exchange Board of India(Settlement Proceedings)Regulations, 2018. Time-period for filing a settlement application rationalized to 60 days from the date of receipt of the show cause notice or a supplementary notice, whichever is later.
For a detailed read, please refer to the hyperlink below.
