In a slew of proposed reforms, regulator Sebi plans to tighten its settlement norms by making suspected defaulters pay more for any delay on their part while fresh steps will be taken to popularise new investment vehicles like municipal bonds, REITs and InvITs.
Among the proposed measures that are to be considered by Sebi board at its meeting today is allowing mutual funds to invest in a new class of 'alternative securities', which would initially comprise real estate and infrastructure investment trusts, a senior official said.
Also, the board is likely to discuss developments about the Tata group with respect to allegations of violation of corporate governance and insider trading norms. The matter related to Vijay Mallya and United Spirits is also expected to come up for discussion.
Suspecting "several thousand entities" of violating securities law to avoid taxes, Sebi plans to clamp down on those involved in stock manipulations and take action against all listed companies, along with their directors, found to be in cahoots with such operators.
Besides, Sebi will refer the findings of all the details about the beneficiaries and facilitators of such trade to the Income Tax department for further action. Based on analysis, about 32,000 entities in various categories were identified for further examination, he added. Sebi plans to give an option to all market intermediaries and companies to make their regulatory payments in digital mode. It will facilitate speedy and easy transactions while reducing failure due to payment gateway issues.
The regulator is looking to lower broker fee to Rs 15 per Rs 1-crore transaction from Rs 20 as part of calibration of various other fees collected by Sebi from different market intermediaries. It has been a long-pending demand of broker and market participants. Even after reducing the broker fee, Sebi is expected to see an increase in its overall fee income as certain new charges, including filing fee for draft scheme of arrangements and processing fee on applications, will be levied.
Defaulters whose application for settlement of cases is delayed will soon be required to pay a non-refundable Rs 2,000 seeking condonation of the delay. Further, such entities will have to pay additional money in case there is more than 60 days of delay in applying for settlement.
Currently, settlement applications at pre show-cause notice stage and on suo-motu basis are treated equally. Pre show-cause notice is issued during investigation or on issuance of settlement notice after completion of probe and before initiation of enforcement action. As a result, the official said there is little incentive for defaulters to come forward on their own before investigation or enforcement action.
Among others, defaulters will be given 15 days from the date of intimation of settlement amount to remit the same. The Proceeding Conversion Factor (PCF), used to arrive at the settlement amount, will be lower for entities filing voluntary or suo-motu settlement applications. With respect to cases of fraudulent and unfair trade practices, the reduction in PCF will be decided on the basis of evidence, disclosure and assistance provided during the investigation.