SEBI makes announcement after board meet


The Securities and Exchange Board of India (SEBI) Chairman Ajay Tyagi on Tuesday made a string of announcements after the conclusion of its board meeting.

Tyagi said that the regulator will soon release a revised circular on KYC requirements and eligibility norms for foreign portfolio investors (FPIs). The SEBI Board considered proposed amendments of the Khan Working Group, which were discussed and agreed upon.

The cutting down on total expense ratio of mutual funds will save investors money between the range of Rs 1,300-1,500 crore. The regulator said that the mutual fund industry must adopt a full trail model of commission and all expenses must necessarily be paid from the scheme and not from associate asset management companies, sponsors or trustees.

Under the initial public offering (IPO) process, the use of UPI has been approved as the payment mechanism. Large corporates shall raise 25 percent of their total borrowing via the bond market. Any corporate which has listed specified securities or NCDs as on 31 March shall be considered as large a corporation.

Regulatory lawyer and founder of RegStreet Law Advisors Sumit Agrawal said that the SEBI has relaxed the consent mechanism to handle only serious cases, but has kept its discretion to not settle those proceedings which could have a market-wide impact. In another big development, it was announced that ICICI Bank & Chanda Kochhar have applied for consent in Videocon case.

The board has approved allowing foreign entities to trade in commodity derivatives provided the entity has an exposure to the physical commodity market. The National Stock Exchange (NSE) has filed a consent application in the colocation case; it will consider the consent application and take an appropriate decision.

SEBI will not consent to a second settlement application if the earlier application for the same default was rejected. A High Powered Advisory Committee will be formed to look into settlement applications.
Both the NSE and Bombay Stock Exchange (BSE) have applied for commodity exchanges towards bringing a universal exchange. The board added that the application will be considered and a decision will be taken.

SEBI, in consultation with the Department of Economic Affairs (DEA), Ministry of Finance, the government, the RBI, and the Central Board of Direct Taxation (CBDT), has approved a common application form for FPI registration, Permanent Account Number (PAN), and KYC for opening bank and demat accounts by FPIs.

The Board was also informed of restrictions imposed by the regulator on fugitive economic offenders (FEOs). These offenders will be restricted from raising capital through IPOs, a move which could prevent them from taking control of a listed company.


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