Sebi has announced a list of reforms on Thursday, a move, which is being welcomed by participants in various markets. Additionally, a strong warning was issued by the regulator with respect to the recent circulation of unpublished financial details of certain listed companies on WhatsApp and stated that no one irrespective of his position would be spared if found guilty. If needed, the insider trading norms would be toughened.
Given below is a list of the reforms:
- Allowing Asset Reconstruction Companies (ARCs) security receipts to be listed and traded on the exchange.
- Easing regulations for infra investment and real estate trusts and more options given to listed firms for ensuring public shareholding of at least 25%.
- Proposed consultation paper detailing the changed rules for advisors in investment firms
- Convergence of commodity and stock exchanges; trading in all allowable products to be provided by all bourses from October 1, 2018
- Permitting investment of at least 50% stake by REITs in holding companies
- Allowing usage of electronic communication mode for apprising investors about share allotments, refund orders etc instead of physical means.
- 10% capping on cross holding among credit rating agencies and increase in minimum net worth prerequisite to Rs 25 crore. It has proposed a set of measures for intensifying the operational and financial eligibility of their promoters.
- Greater disclosure prerequisites for credit rating agencies
- 10% capping on cross-shareholding in mutual funds
- Relaxation of entry norms for foreign portfolio investors
- Rationalizing ‘fit and proper’ criteria and simplifying the broad based prerequisites for foreign portfolio investors
Decisions on the following matters would be taken after further discussions:
- Loan default disclosure norms
- Revamping of corporate governance norms
BSE’s CEO, Ashishkumar Chauhan welcomed Sebi’s move and felt that it would go a long way in facilitating its 3.71 crore plus registered investors. Angel Broking’s Amar Singh felt that the reform on convergence of commodity and stock exchanges will be a key factor in improving the Indian financial markets of the future.