SEBI’s board meet in June to focus on optimising regulations

SEBI is expected to define minimum and maximum shareholding thresholds for exchanges in their respective clearing corporations
| Photo Credit:
ANI

The Securities and Exchange Board of India’s (SEBI) board is next scheduled to meet on June 18 to approve a slew of measures aimed at taking forward the theme of ease of doing business and optimisation regulations for market intermediaries and different segments, according to sources.

The agenda of the meeting is in the process of being finalised, but sources in the know indicated that it may streamline and ease qualified institutional placements (QIPs), align real estate investment trusts (REITs) and infrastructure investment trusts (InvITs) with equities, easing compliance requirements for alternate investment funds (AIFs) and flexibility in investments, and relax norms for foreign portfolio investors (FPIs) investing only in government bonds.

The board may also finalise the pending issue of clearing corporations’ independence, and weigh tighter rules for small and medium enterprises after a recent surge in regulatory breaches, sources said.

There was no response to an email sent to SEBI seeking comments.

Optimum regulations

Over the past few months, the markets regulator has been consulting with various industry bodies and stakeholders, including stockbrokers, mutual fund houses, investment bankers, companies, trusteeships, research analysts (RAs), and investment advisors (IAs), on procedural challenges. Many tweaks and operational relaxations may be approved as early as the June Board meeting, sources said.

SEBI may allow more investments into REITs and InvITs through mutual funds by doubling limits, aligning the units to equity investments, and also permit the use of liquid mutual fund units by IAs and RAs, with a lien marked in favour of the administration and supervisory body, to meet deposit requirements.

Sources said the board is also likely to clear proposals to simplify the document for qualified institutional placements (QIPs) by removing additional paperwork, and to allow alternate investment funds (AIFs) to offer co-investment options through separate vehicles.

The board may also ratify a simplified registration process for FPIs investing only in Indian government bonds, an extension of relaxation on physical document delivery norms for listed debt issuers, and a separate carve-out for voluntary delisting on public sector offerings.

SME revisit

In the wake of rising instances of fund misuse and fraudulent disclosures by SME companies, the SEBI board may revisit stricter norms for SME listings. These include increasing the promoter lock-in period, mandating higher operating profits, enhancing disclosures, and tightening fund utilisation tracking.

“The previous round of SME tightening had left out some of these suggestions, which now may be revived,” a source familiar with the matter said.

The board may also finalise the pending proposal regarding the independence of clearing corporations (CCs). This includes diversifying ownership in CCs by diluting stock exchange holdings through an ‘offer for sale’ mechanism, similar to earlier corporatisation schemes, said another source.

SEBI is expected to define minimum and maximum shareholding thresholds for exchanges in their respective clearing corporations. The proposal has been held back due to various issues such as new shareholders, majority of public interest directors, default waterfall mechanism, and contributions to settlement guarantee fund, said the source.

Published on May 25, 2025

📰 Crime Today News is proudly sponsored by DRYFRUIT & CO – A Brand by eFabby Global LLC

Design & Developed by Yes Mom Hosting