Key Reforms in Capital Market
SEBI vide its notification dated September 18, 2015 has amended SEBI (SBEB) Regulations, 2014.The highlights of the amendments are outlined as follows:
- In line with the provisions of Companies Act, 2013, the definition of Employees has been modified to exclude the employees of ‘associate company from the ambit of Employee Benefit Schemes.
- Listed companies having employee benefit trusts will have to re-classify the shareholding of the trusts into non-promoter and non-public category within 3 years of enactment of Regulations.. Earlier, these entities were required to re-classify the shareholding within five years.
- Trustees of Employee Benefit Trusts are now allowed to cast their votes for a period of more 3 years, commencing from 28th October, 2014 i.e. from the date of commencement of Regulations.
In order to ensure lucidity in the disclosure requirements, SEBI vide circular dated September 16, 2015 has revised the formats for disclosures required to be made under Regulation 7 of SEBI (Prohibition of Insider Trading) Regulations, 2015 (hereinafter referred to as “the Regulationsâ€).
Regulation 7 of the said Regulations cast a mandate on Director/ KMP/ Promoter to disclose their shareholding upon their appointment as well as continual disclosure on entering into a transaction in the securities of the company.
The revised formats prescribe enhanced disclosure requirements for derivative transactions and to present a holistic view of the shareholding of Director/ KMP/ Promoter and Employees, specific disclosure related to prior shareholding have been incorporated in the formats.
To align the disclosures made in the offer documents with the stipulations prescribed by the Reserve Bank of India (RBI) for NBFCs, the Capital Market Regulator, SEBI vide its Circular dated 15th September, 2015 has introduced some modifications in the disclosure requirements of public issue of debt securities.
With the intent to protect the interest of innocent investors, SEBI vide its notification dated September 10, 2015 has amended the requirement of making allotment to additional 10 anchor investors for every additional Rs. 250 Crore or part thereof, beyond the issue size of Rs. 250 Crores.
Earlier, for issue size beyond Rs. 250 Crore, there was a requirement to make allotment to a maximum number of 25 anchor investors.
CP’s Viewpoint:
The changes mandated by the Board would surely promote the interest of investors on one hand and cast more accountability on the Company, its Directors, and Promoters etc. on the other.