The Securities and Exchange Board of India (Sebi) approved new rules on Sunday, making it easier for banks to turn bad loans into equity and cleared norms for stock market listing of municipal bonds to aid smart cities’ development.
Besides, in an apparent move to plug potential “insider trading” and leaking of price-sensitive information, the market regulator made it mandatory for companies to disclose board decisions within 30 minutes after the meeting.
To help young entrepreneurs raise funds, Sebi also announced a roadmap for 2015-16, and said it would come up with new avenues such as Institutional Trading Platform (ITP) and crowd-funding, while streamlining and strengthening its enforcement process for better efficiency.
The Sebi board, which was also addressed by finance minister Arun Jaitley, approved the setting up of global financial hubs — International Financial Services Centres (IFSC) — within India on the lines of Singapore and Dubai. The first IFSC will be set up in Gujarat called the Gujarat International Finance Tec-City (GIFT).
Stock exchanges and clearing corporations would be provided concessions for setting up ventures in IFSC.
The regulator also made it easier for domestic funds to manage offshore pooled assets. It eased the existing ‘20-25 rule”, which required a minimum of 20 investors and a cap of 25% on investment by an individual, for funds from low-risk foreign investors. “This will enable local fund managers to manage offshore funds effectively and also garner more offshore business,” Sebi said.
According to Sebi chairman UK Sinha, large institutional investors such as pension funds and insurance companies, “who are at the moment little shy in making investments will get the desired comfort,” and can now find it attractive to invest in Indian municipal bonds.
In the first post-budget interaction with Sebi board, Jaitley also discussed recent trends related to investments by foreign portfolio investors and domestic institutional investors in the securities markets. “They (Sebi) talked about capacity-building at Sebi, both in terms of ability to acquaint with the subjects and other infrastructure requirements,” Jaitley said about the discussions on the merger of commodities regulator, the Forwards Markets Commission (FMC), with Sebi.