SEBI has introduced some key changes in rules for share buyback by Indian Companies, SME listing and Foreign Institutional Investors (FIIs). Following are the highlights of changes introduced:
On buyback
- Mandatory to buy back 50% of offer size; penalty of 2.5% on failing to do so
- Buyback period reduced to six months from one year
- Tender route compulsory if buyback size is over 15% of paid-up capital
On SME listing
- Start-ups and SMEs allowed to list without IPO or fundraising
- Separate ‘institutional trading platform’ for such companies only for informed investors
- Minimum trading/ investment amount to be Rs 10 lakh
On FII routes
- FIIs, sub-accounts & QFIs merged into a new class called the foreign portfolio investors
- Direct registration of FIIs and sub-accounts with Sebi to be done away with
- Risk-based KYC, depending on investor profile
Other announcements
- Single SRO for MF product distributors
- Green signal for AMCs to become prop trading members in debt segment
- Limited-purpose membership for MF distributors
- MFs not allowed to appoint a custodian belonging to the same group
- More power to clearing corporations
- New sub-category of ‘angel funds’ under AIFs
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