The Securities and Exchange Board of India (SEBI) will notify the final rules for listing of start-ups within one week, SEBI chairman UK Sinha said while speaking to mediapersons on the sidelines of a conference of the Institute of Chartered Accountants of India (ICAI) in Indore on Saturday.
Under the new norms, the stock exchanges would have a separate institutional trading platform for listing of start-ups. However, the minimum investment amount would be Rs 10 lakh to keep out small retail investors.
The proposed norms are expected to simplify compliance requirements for start-ups to get listed to easily raise funds instead of approaching foreign investors.
The SEBI has relaxed many norms such as disclosure requirements, caps on advertisement and publicity spend, and the mandatory lock-in period for promoters and other pre-listing investors.
SEBI chairman Sinha said the proposed merger of commodity market regulator Forward Markets Commission (FMC) with SEBI will be completed by September-end, following which SEBI's rules and regulations will apply for commodity exchanges.
Announced by finance minister Arun Jaitley during the last budget presentation, the merger is expected to curb wild speculations in the commodities market, while facilitating participation of domestic and foreign institutional investors.
Regarding the role foreign investors, Sinha said foreign portfolio investors had very little influence on the Indian stock markets. "In 2014-15, mutual funds invested about Rs 72,000 crore in equities alone, while the figure for first three months of this fiscal (April-June) is about Rs 32,000 crore. In this three-month period, the net outflow by foreign portfolio investors was almost negative," he said, adding that foreign investors were welcome to invest in India.
The Employees' Provident Fund Organization (EPFO) recently began investing 5% of its funds in equities. This, Sinha said, was further endorsement of the trust placed by the labour unions in the Indian stock market. "We are happy that PF funds will be invested for a long-term period... Had they invested for the short-term, we would have been worried," he said.