SEBI Board Meeting

In the SEBI’s Board Meeting held on 24^th November 2011, following decisions have been taken by the Board:

 1.  Business Responsibility Reports

• In order to assess fulfillment of the environmental, social and governance responsibilities of listed entities, it has been decided to mandate listed entities to submit Business Responsibility Reports, as a part of their Annual Reports, describing measures taken by them along the key principles enunciated in the National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business’ framed by the Ministry of Corporate Affairs (MCA).
• It has been decided that to start with, the requirement will be applicable to top 100 companies in terms of market capitalisation and would be extended to other companies in a phased manner.
• This move will encourage Corporates to better understand and actually execute their responsibilities towards their Socio-economic environment.

2.  Tenure for conversion of warrants issued along with public/rights issues

• There are many a Companies that issue Convertible Warrants, alongwith their Public/ Rights Issue. However, under the SEBI (ICDR) Regulations, the tenure of these Warrants and their conversion period have not been mandated anywhere, which was leading to some confusions and possible misuse.
• Thus, with the intent to avoid the possible misuse, it has been decided to specify a maximum tenure of 12 months for warrants issued along with public/rights issue of securities.
• The issuers would also be required to provide disclosures about utilisation of funds so raised, both in the offer document as well as on a continuous basis.

3.  Review of policy on ‘Anchor Investors’

• The concept of Anchor Investors (AIs) was introduced by SEBI in June 2009 as a class of committed investors who can be relied upon to anchor an issue of capital in all market conditions, adverse or otherwise. 
• At present, as per Reg. 2(1)(c ) of SEBI (ICDR) Regulations, “an anchor investor” means a qualified institutional buyer who makes an application for a value of ten crore rupees or more in a public issue made through the book building process in accordance with these regulations.”
• To make the concept more effective, it has been decided to prescribe a minimum allotment size of Rupees Five crore and maximum number of AIs, slab-wise.

4.  Disclosures where Funds are shown as promoters

• Considering the constraints in disclosure by investee companies regarding Funds (such as Venture Capital Funds, etc.) which are shown as one of the promoters of such investee company, it has been decided to specify a separate set of disclosures for them.

5.  Review of net worth for Debenture Trustees

• Regulation 7A of  SEBI (Debenture Trustee) Regulations, 1993 mandates for the Networth requirement of Debenture Trustees at Rs 1 Crore.
• The Board, at its Meeting, approved amendment to the said Regulation to increase the net worth requirement of Debenture Trustees from existing Rs 1 Cr to Rs 2 Cr.
• Further, the Board also approved to grant a time period of two years to existing Debenture Trustees, from the date of notification of Regulations, to the new level.

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