SEBI will also monitor how companies that raise more than Rs 100 crore through public float use the proceeds. Earlier, the floor was Rs 500 crore. The market regulator has also allowed investors to use e-wallets to buy mutual funds up to Rs 50,000 a year.
Speaking on derivatives products for the commodities market, Tyagi said the challenge lies in “creating synergies between the spot market, which we (SEBI) do not regulate, and the derivatives market for commodities, which we will”. “Except for agricultural products, which are regulated by the Agricultural Produce Market Committee, many commodities in India do not even have a regulator (overseeing trades),” Tyagi said.
Having absorbed the activities of the erstwhile commodity market regulator Forwards Market Commission last year, SEBI will now allow brokers to integrate their equity and commodity broking arms into a single entity.
SEBI has also reduced the issue size from Rs 500 crore to Rs 100 crore for supervising the use of proceeds raised from the primary equity market.
A monitoring agency should be mandatorily appointed by investment bankers to an IPO to oversee the use of proceeds raised through IPOs, FPOs and Rights Issues and prevent funds from being siphoned off. The frequency of reporting has been increased from half-yearly to quarterly.
Broadening investor base
SEBI said it will also classify systematically important NBFCs registered with the RBI and with networth of over Rs 500 crore as qualified institutional buyers (QIBs), which makes them eligible for enhanced investment limits in IPOs. Currently, banks and insurance companies fall under the QIB category. This is also expected to broaden the domestic investor base for IPOs and reduce the dependence on foreign investors.
In an effort to help banks recover money from their non-performing assets, SEBI will also now remove the six-month lock-in period and the eligibility criteria for preferential share allotments.
The regulator plans to exempt scheduled banks and financial institutions like NBFCs from restrictions on preferential allotment of equity shares. This allows lenders to accept equity from borrowers who are going through a corporate or strategic debt restructure, an exemption that mutual funds and insurance companies already enjoy.
SEBI will also introduce rules to ban NRIs from investing through participatory notes and will bring in a framework for the consolidation and re-issuance of corporate debt to increase liquidity in the secondary market.
Source: The Hindu Business Line