Mumbai: In a series of reforms, capital market regulator Sebi's board on Wednesday cleared easing of norms to kick-start startup listings and allowed mutual funds to segregate distressed assets to safeguard investment returns.
At a meeting held here, the Sebi board also approved a proposal to expand the offer-for-sale mechanism for reduction of stake in listed companies and relaxed clubbing of investment limit norms for well-regulated foreign investors.
The expansion of offer-for sale scheme will include all companies with Rs 1,000-crore and above market-capitalisation.
Currently, FPIs are treated as part of the same investor group and the investment limits of all such entities are clubbed for deriving the investment limit as applicable to a single FPI in case of the same set of ultimate beneficial owners investing through multiple entities.
"The proposal that clubbing of investment limit for FPIs will be on the basis of common ownership of more than 50 per cent or common control was approved," Sebi said in a statement.
However, the clubbing of investment limits would not be applicable in case of entities having common control if the FPIs are appropriately regulated public retail funds.
Public retail funds typically include insurance companies, pension funds and mutual funds or unit trusts that are open for retail subscriptions.
After considering the recommendations of a working group under the chairmanship of former deputy governor at RBI, H R Khan, and comments received from public, Sebi board decided that the clubbing of investment limit for FPIs should not be done on the basis of same set of beneficial owners.
The markets regulator is examining the whistleblower complaint against Dilip Shanghvi-led Sun Pharmaceutical Industries.
A whistleblower had last month approached Sebi with a document alleging various irregularities by the company, its promoter Shanghvi and others.
"There is whistleblower complaint which we are examining. I have nothing more to add," Sebi Chairman Ajay Tyagi told reporters after its board meeting.
The regulator said it will carry out necessary amendments to FPI regulations and issue necessary guidelines to implement the changes.
Besides, the regulator said that an earlier proposed exercise for determining a uniform bond valuation methodology to be followed by all regulated entities across the financial sector would not be pursued.
Such an exercise was suggested by a working group on development of corporate bond market in India, chaired by Khan.
However, Sebi will prescribe high-level principles to be followed uniformly across all mutual funds for strengthening the existing system of valuation of corporate bonds for mutual funds.
Regarding the pricing agencies, the regulator has decided to evolve a supervisory and regulatory framework.