The recent board meeting of SEBI announced a package of progressive regulatory reforms with a view to simplifying compliance, expanding market access, and raising the efficiency of operations in India’s capital markets. Steps are part of the overall strategic objective of raising India’s status as a competitive investment destination in the world. The major highlights in relation to ease of doing business are as follows:
Simplifying Regulatory Submissions by Listed Companies
Unified Filing Framework:
The listed companies are now able to file a single regulatory filing, which will be supplied to all the stock exchanges, eliminating duplication.
Streamlined Periodic Disclosures:
Periodic reports harmonization to ease compliance and eliminate duplication.
Timely Board Disclosures with Flexible Timing: Boards can disclose after the trading hours with operational convenience without compromising on transparency.
Reforms in Public and Rights Issues
Timelines for Listing Accelerated:
The listing timeline following a public issue has been shortened from six to three working days, greatly speeding up access to capital.
Security Deposit Exemption:
Security deposit of 1% of issue size for public and rights issues have been exempted, thus reducing initial capital outlay.
Accelerated Rights Issues:
The processing period for rights issues has been shortened from as high as 317 days to 23 days only, hence raising the flexibility in fundraising.
Foreign Portfolio Investors (FPI) Improvements
Streamlined Compliance for FPIs with G-Sec Focus:
Regulatory requirements have been relaxed for FPIs investing exclusively in government securities, enabling wider participation.
Modified Disclosure Threshold:
The disclosure threshold to make disclosures in detail has been increased to FPIs with Assets Under Management (AUM) of more than ₹50,000 crore to reduce the compliance burden for small investors. Alternate Investment Funds (AIFs) Support Measures
Flexibility in Encumbrance:
AIFs are now able to create encumbrances on equity shares, hence enhancing their ability to raise funds.
Improved Due Diligence Standards:
Adopted to ensure effective governance while making it simple to operate funds.
Mutual Fund & Investor Advisory Reforms
‘MF Lite’ Framework: Simplified regulatory structure for passive mutual fund schemes to promote increased retail participation with lesser compliance obligations.
Research & Advisory Companies:
Investment Advisers (IAs) and Research Analysts (RAs) are allowed to receive fees 12 months in advance, providing them with greater business flexibility.
Technological & Operational Innovations
UPI Integration and T+0 Settlement:
Optional take-up of UPI block and 3-in-1 account facilities to enable real-time trade clearings and enhanced investor onboarding.
Reform of Informal Guidance Scheme:
Stronger structures for issuing prompt, concise answers to compliance questions posed by market participants.
These broad-based reforms are a reflection of SEBI’s endeavour in creating a more investor-friendly, responsive, and transparent regulatory environment. By simplifying compliance, streamlining capital-raising processes, and making greater participation easier, SEBI has contributed immensely towards making India a destination of choice for global investments.
