For voluntary delisting, in addition to the reverse book building (RBB) process, Sebi has introduced a fixed price process where the promoter can offer to buy back all shares from the public at least 15 per cent premium to its “fair price”. Further, Sebi has reduced the threshold under the counter offer mechanism to 75 per cent from 90 per cent of public shareholders. Under the RBB process, the delisting process is considered successful if the post-offer aggregate shareholding of the promoter or the acquirer reaches 90 per cent.

The RBB framework is considered to be very stringent as the delisting price arrived at using this process is often quite high, making the offer untenable.

Sebi chairperson Madhabi Puri Buch said as India’s market matures, it is imperative to allow companies to go private if they wish to do so. “This is not Hotel California,” where you can check in any time you like but you can never leave.

Sebi has revised quantitative parameters such as median quarter sigma order size, market wide position limit, and average daily delivery value for the selection of stocks in the F&O segment. Sebi officials said if the new criteria are applied, the number of stocks in the F&O segment will increase by a small number from the current 182. Also, there could be an addition and deletion of about two dozen stocks.

Buch also said there has been an expert group formed to address certain concern areas around F&O trading. She said there are certain concern areas such as people borrowing heavily to trade in the derivatives segment. Also, she said the concern is that a large amount of India’s household savings are flowing into trading, which is an unproductive activity and not leading to any economic or productive gains.

“We as a country should think if we can do anything about this,” said Buch.

Among other decisions cleared by the Sebi board include exempting university funds and university-related endowments from additional disclosure requirements for foreign portfolio investors (FPIs).

Sebi has also considerably eased the public issue process for debt securities and non-convertible redeemable preference shares. The regulator has also reduced the trading lot for privately-placed infrastructure investment trusts (InvITs) to Rs 25 lakh.

It has also proposed to introduce a new fee collection mechanism for registered investment advisers (IAs) and research analysts (RA).

Sebi has also proposed an independent external evaluation of the performance of stock exchanges and other market infrastructure institutions (MIIs). Such evaluation will take place once every three years.

Sebi has also removed the automatic financial disincentive on managing directors and chief technology officers of MIIs on account of technical glitches. This follows industry feedback that the disincentive structure was hampering the attraction and retention of talent.

On Alternative Investment Funds (AIFs), the market regulator approved a proposal to limit the extension of a large value fund’s tenure to five years, subject to approval from the majority of unit holders.

In a relief to them, the regulator has also permitted AIFs to borrow for a period of up to 30 days to meet temporary shortfalls in drawdown.

Sebi has also pushed for data classification and localisation by its regulated entities to ensure robust security controls for regulatory data. It has also approved a cyber-security and cyber resilience framework.

First Published: Jun 27 2024 | 9:11 PM IST