The Securities and Exchange Board of India (SEBI) recently met in Mumbai, in the Board Meeting conducted on Wednesday. The SEBI Budget Estimates for the Financial Year 2023-24 was passed, along with some other major reforms.
SEBI, the Indian securities regulator, approved measures covered in 17 items to strengthen the securities market and improve ease of doing business. The measures include funding of secondary market trading, amendments to mutual fund regulations, and updates to disclosure requirements.
Notably, Sebi has approved a framework of ASBA-like facility for secondary market trading, introduced an alternative route for Private Equity Funds to become sponsors of Mutual Funds, and proposed updates to the LODR Regulations. These measures, amidst tough macro-economic conditions, will have a positive impact on the market and risk management.
The major areas of discussion and key decision of the meeting include matters that are: –
ESG related
- Balanced Framework for ESG Disclosures, Ratings and Investing
- Establishing a regulatory framework for Environmental, Social and Governance (ESG) Rating Providers in Securities Market by introducing a new chapter in the SEBI (Credit Rating Agencies) Regulations, 1999.
Secondary Market related
- ASBA – like facility for trading in Secondary Market: Option to investors
- Upstreaming of clients’ funds by Stock Brokers (SBs) / Clearing Members (CMs) to Clearing Corporations (CCs) to mitigate credit risk on intermediaries
- Amendments to Stock Brokers Regulations to institute a formal mechanism for prevention and detection of fraud or market abuse by stock brokers
- Introduction of Regulatory Framework for Index Providers
Mutual Funds related
- Framework for “Corporate Debt Market Development Fund”: Backstop Facility for specified Debt Funds
- Bringing clarity on the roles and responsibilities of Trustees and Board of Asset Management Companies of Mutual Funds with a focus on Unitholder protection
- Review of Regulatory Framework for Sponsors of Mutual Funds to give greater flexibility to the industry
Shareholder Empowerment Related
- Amendments to LODR Regulations, 2015
- Amendments to SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, with the objective of increasing transparency and streamlining certain issue processes
Debt Market Related
- Introduction of concept of General Information Document (GID) and Key Information Document (KID) for issuance of Bonds/ Commercial Paper and streamlining of disclosures
- Extension of “Comply or Explain” period for Large Corporates (LCs) to meet their financing needs from debt market through issuance of debt securities to the extent of 25% of their incremental borrowings in a financial year
- Extension of ‘Comply or Explain’ period for the High Value Debt Listed Entities (HVDLEs) in respect of corporate governance norms and simplification of disclosure requirements pertaining to the payment of interest/ coupon and redemption amount.
AIF related
- Amendment to AIF Regulations to prescribe provisions for valuation of investments, dematerialisation of units, certification requirement for key employees of Investment Manager, transactions with associates, and option to sell unliquidated investments to a new scheme of Alternative Investment Fund
Investor Grievances Redressal related
- Strengthening the Investor Grievance Redressal Mechanism in the Securities Market through amendments to Regulations to operationalize Online Dispute Resolution (ODR) Mechanism for investors across registered intermediaries/ regulated entities
SEBI Budget
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