SEBI Board Meeting Highlights: From tweaked FPI disclosure threshold to easier AIF compliance, a summary of key proposals cleared

SEBI March 24 Board Meeting Key Takeaways: India’s capital market regulator SEBI conducted its 209^th board meeting on Monday, March 24, clearing a number of proposals touching aspects such as ease of doing business, foreign portfolio investors (FPIs), market infrastructure institutions (MIIs), market analysts and disclosures. This marked the first board meeting of the market regulator under its new chairperson Tuhin Kanta Pandey, who took over from his predecessor Madhabi Puri Buch on March 1.

Here are five key proposals cleared by the SEBI board in its March 24 deliberations:

SEBI Board Meeting Update: A higher threshold for FPIs required to make additional disclosures

The board cleared a proposal to require foreign portfolio investors (FPIs) to make certain additional disclosures in case their equity assets under management (AUM) on Dalal Street cross the Rs 50,000 crore mark. Currently, this limit is placed at Rs 25,000 crore.

This decision is in view of a dramatic spike in the cash equity market trading volumes trading in the recent years.

SEBI Board Meeting Update: Easier compliance for alternative investment funds (AIFs)

The board decided to allow Category II alternative investment funds to opt for A-rated listed debt securities similar to unlisted securities.

Currently, Category II AIFs are required to hold the lion’s share of their investments in unlisted securities.

However, certain revisions in the listing norms require entities issuing listed debt securities to issue fresh debt only in listed form. A grim availability of unlisted debt securities can consequently restrict AIFs from complying with the minimum investment norms in unlisted securities.

SEBI Board Meeting Update: Public interest directors’ appointment process reviewed

In a bid to aid MII governance, the board reviewed the process of filling positions such as Compliance Officer (CO), Chief Risk Officer (CRiO), Chief Technology Officer (CTO), and  Chief Information Security Officer (CISO) at such entities.

The board cleared the following changes related to the appointments of public interest directors (PIDs) on market infrastructure institution boards:

• The existing process for such appointments will continue, requiring SEBI approval but not mandating shareholder approval
• The board of an MII looking to reappoint an existing public interest director must record the rationale behind the decision and inform SEBI
• An MII’s board may prescribe a minimum cooling-off period for key management personnel before joining a competing entity; SEBI will no longer presctibe a cooling-off period in such cases
• The board will ned to clear the appointments, reappointments and terminations, not the nomination and remuneration committee

SEBI Board Meeting Update: Investment advisers and research analysts to charge advance fees

Investment advisers and research analysts may levy fees from their clients for up to one year. Currently, they are only allowed to charge fees for a maximum of six months.

Additionally, fee-related provisions will only be applicable in case of individual and Hindu Undivided Family (HUL) clients, and not to non-individual clients.

SEBI Board Meeting Update: A high-level committee to be formed to review provisions covering conflict of interest, disclosures & related matters

The board decided to form a high-level panel “to undertake a comprehensive review of the provisions relating to conflict of interest, disclosures pertaining to property, investments, liabilities etc., and related matters in respect of Members and Officials of the Board”, according to an official release.

The committee will comprise eminent individuals and experts with experience in the domains of constitutional, statutory or regulatory bodies, government or public or private sectors and academia.

SEBI Board Meeting Update: Amendments to merchant banker, debenture trustee and custodian regulations deferred

Deferring certain revisions in rules related to merchant bankers, debenture trustees and custodians, the board said that it would consider the proposals at its next meeting.

Catch key stock market updates here. For all other news, visit Zeebiz.com.