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SEBI board meeting outcome: Markets regulator clears reforms giving more say to investors
Here's a lowdown on key far-reaching reforms passed by SEBI in today board meet:
-ASBA-like facility for secondary markets will now be optional for brokers and investors
- Current practice of having permanent board members for listed companies eliminated; new rules from April '24
-Top 100 listed firms must clarify market rumours from October 1, 2023
- Allowed PE funds as sponsors of MF schemes, permits self-sponsored AMCs
-Nod to mutual funds to launch multiple ESG-based schemes
-Nod to comprehensive overhaul of operational dynamics of AIFs
-Evaluating Total Expense Ratio (TER) process, to release detailed guidelines
-Approved backstop fund for Indian corporate debt market; to set up fund worth Rs 33,000 crore
-SEBI chief Madhabi Puri Buch denied to comment on Adani-Hindenburg row, said will respect and follow order of SC
SEBI evaluating Total Expense Ratio process, to release detailed guidelines: Chairperson Buch
SEBI chief Madhabi Puri Buch announced that the regulator is currently assessing the process of Total Expense Ratio (TER) and plans to release comprehensive guidelines on the matter.
Speaking to reporters after a SEBI board meeting, Buch emphasized the importance of transparency in TER and stated that it must encompass all expenses.
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SEBI Board Meeting LIVE
SAT success data 2021-22 is 81 percent, confirms Buch
In terms of IPO, past share agreements fall off as the shareholders base changes: SEBI chief
RBI has approved the limited purpose clearing corporation in terms of repo: Buch
Another huge success in terms of interregulatory cooporeration, the RBI has approved the limited purpose clearing corporation in terms of repo. Three out of four approvals have come in... huge support from RBI... once that comes through, the corporate bond repo market will also get a fillip.
In order to develop the bond market, you need liquidity, for liquidity you need market making, for market making you need a repo market... without a repo market, you can't have market making because the cost of borrowing is just too high.
Everybody assumes that SEBI has unlimited powers... 'Boss, aisa nahin hain': Buch
Our Parliament has given us certain set of rules. We are not a Brahmastra kind of regulator: SEBI chief
There are certain nuances in law, which have required us to act in a certain way, we need to fix that, we are on our way
We are told that we are an overactive regulator
SEBI Board Meeting LIVE Updates: In terms of forensic audit, we have zero capability, says Buch
It is not possible to develop that capability overnight.
We are conscious that this is a skill set that will be required... we must develop that capability, initially with partners etc.
SEBI Meeting LIVE updates
SEBI Chairperson Madhabi Puri Buch denied to comment on the market regulator approaching Supreme Court over Arshad Warsi SAT order
SEBI chief says the backstop facility for corporate debt market will be up and running in 3-6 months
There is a 90% probability of losing money, going to mandate display of risk-factor, says SEBI chief
Traders should know that you will lose money trading along with charges like STT, brokerage, squaring off etc: Buch
Traders should be warned that you are playing the odds that are worse than Las Vegas
We are going to mandate that brokers display the risk-factor in trading
We will mandate brokers to clearly express these risks to investors and traders and these are our next year KRA's
There are certain guiding principles which SEBI has on MF Total Expense Ratio (TER), says Buch
--Believe economies of scale is not at scheme level but it's at asset level
--Brokerage paid by MFs to be kept insideTER
--Do not appreciate double charging unit holders
--There's a distinct possibility brokerage paid by mc for reasons other than professional reasons
--75% SEBI matters in the Supreme Court are linked matters
SEBI Chairperson foreign index provided which has an Indian security in the index does not come under purview
If you are a foreign index provider who incidentally has an Indian security in your index, then you don't come under our purview... if you are doing India-based index, which are being used by Indian mutual funds for Indian investors, then it will come under our purview: Madhabi Puri Buch
Sebi will bar domestic mutual funds from using foreign index that don't comply with our regulations: Buch
Pay your broker as much as you like but please bring transparency: SEBI's Buch
We will never allow another Karvy episode in our market period: Buch
"There is nothing we will not do... over our dead body (another Karvy like incident will happen)... there will not be another Karvy,"asserts SEBI chairperson.
SEBI Board Meeting LIVE updates: Buch says board approves backstop fund for corporate debt market
--The corpus of corporate debt fund is Rs 33,000 crore, says MadhabiPuriBuch
--The corpus of corporate debt fund is now Rs 33,000 crore: Madhabi Puri Buch
--The government guarantee is Rs 30,000 crore.
--The initial corpus of corporate debt fund is Rs 3,000 crore; which will give a sovereign guarantee of Rs 33,000 crore only for mutual funds.
--Full corpse will be Rs 33,000 crore. Rs3,000 will not be relevant. 9 percentof the total is contributed the mutual fund, 1 percentby the fund entity and the rest by the primary entity, clarifies Buch
--This will be at the AMC level.
Everyone has an option today. Our expectation is that broking is a competitive market. It is not easy: Chairperson Buch
Listed firms must disclose Board meet outcome within 30 mins from end of meet, says Chairperson Buch
• Listed companies must disclose board meet outcome within 30 minutes from end of meet
• Must disclose material events emanating from co within 12 hours
• Top 100 listed compnaies to verify, confirm/deny/clarify on market rumours from October 1, 2023
• Top 250 listed companies to verify, confirm/deny/clarify on market rumours from April 1, 2024
SEBI Board Meeting LIVE updates: Board approves to set up corp debt market development fund as an AIF
SEBI Board Meeting LIVE updates: Buch on AIF regulations
The provision would cover transactions by an AlF, from or to, associates of AIF, or schemes of AIFs managed or sponsored by the manager or sponsor. Their associates, or an investor who has commitment to the extent of more than 50% of the corpus of the scheme of AlF: Madhabi Puri Buch
First, very very important... all AIFs need to submit their data for benchmarking... earlier, there were concerns that valuations were not standardised (unlike disclosures). Now there will be standard ways in which valuations will be done: Madhabi Puri Buch
In the AIF space we have several proposals. The first one is for Aifs to submit the standard documents:Madhabi Puri Buch
Most AIFs follow these standards informally:Madhabi Puri Buch
SEBI Board meet: Compliance on large corporates
The Board decided that the period of compliance for Large Corporates to meet their financing needs from debt markets through issuance of debt securities to the extent of 25% of their incremental borrowings in a contiguous block of two financial years will be extended to the contiguous block of three years: Madhabi Puri Buch
Chairperson Buch on bonus issue
"We found that there have been some problems... even before the previous shares issued were traded and listed, they came up with bonus issue. Letter of the law, nothing barring them... but spirit of the law it was completely wrong. We are now fixing it."
SEBI Board Meeting LIVE updates:
Periodic shareholders approval for any special right granted to shareholder of listed entity to address the issue of perpetuity of
special rights: Madhabi Puri Buch
Procedural changes in director appointments and IPO introduction: Madhabi Puri Buch
If you have an intent to have hard underwriting, it must be disclosed ahead of time and it cannot be done later: Madhabi Puri Buch
SEBI Board Meeting LIVE updates: No issue like SVB in India, assures Chairperson Buch
We don't like abhimanyu's in our markets; someone who comes in must have the ability to go out: Madhabi Puri Buch
SEBI Board Meeting LIVE updates: Chairperson Buch on trustees in an AMC
"Principle focus of the trustee is in areas where there is potential conflict between shareholders of the AMC and unit holders of the scheme. A lot of procedural stuff, tick box approach has been taken away from trustues. Truestes must focus on those areas where they have fiduciary responsibility."
AMCs also have to take responsibility to ensure that unitholders' interests are not compromised: Madhabi Puri Buch
SEBI Board Meeting LIVE updates: Board approves framework to prevent and detect fraud by brokers
Global jurisdictions are just amazed. We are perhaps very unique and the entire chain is transparent. I refer this as India market stack: Chairperson Madhabi Puri Buch
"The board has approved a Framework to provide for an institutional mechanism for prevention and detection of fraud or market abuse by stock brokers"
"In secondary market, amendment to the stock broker regulations, which casts a responsibility on the broker to monitor for market abuse"
ASBA-like facility for secondary markets will be optional for brokers and investors, says Chairperson Buch
ASBA-likefacility for secondary markets: At this stage, it will be optional for brokers and investors to offer and avail of this:SEBIChairpersonMadhabiPuriBuch
Application Supported By Blocked Amount (ASBA) procedure is used in applying for initial public offers (IPO) and other primary market issues. UnderASBA, the fund, though blocked, remains in your account earning interest.
SEBI Board Meeting LIVE updates: Buch on ESG investing
In terms of ESG investing, risk of greenwashing must be minimised, therefore we are introducing two things. Mutual funds have a restriction on how many schemes they can launch. We have now created ESG as a category, in short you can have more ESG schemes going forward. But, at the same time, there is greater emphasis on disclosures so that investors know what they are putting their money into: SEBI Chairperson Madhabi Puri Buch
ESG rating providers must be governed. Conflict of interest is very important. Audit firms have come under tremendous scrutiny... right at the start we want to make sure there is no conflict of interest (in terms of giving assurance and rating services, and consultation services):SEBI Chairperson Madhabi Puri Buch
SEBI allows PE funds as sponsors of MF schemes: Chairperson Madhabi Puri Buch
SEBI Board Meeting LIVE updates
We now have a very powerful tool known as RSR which will help us in assured ESG rating ahead of anyone on the planet: SEBI Chairperson Madhabi Puri Buch
SEBI Board Meeting LIVE updates: Capital market regulators appreciated for India making T+1, says Chairperson Buch
One of the issues Sebi has been looking into is the spirit of law vs letter of the law. We want to take this forward in the coming year and we have been speaking about what the regulator needs to do about it: SEBI Chairperson Madhabi Puri Buch
SEBI Board Meeting LIVE updates: Chairperson Buch on Adani-Hindenburg issue
On Adani-Hindenburg issue, SEBI Chairperson Madhabi Puri Buch says, "Elephant in the room is Adani, we don't comment on subjudice matters."
"If you see the SC order it instructs us to give updates. That is why we are not allowed to discuss the matter with the public at large."
"We will follow the advice of the Supreme Court in (the Adani case). We are duty bound to follow it"
SEBI Board Meeting LIVE updates: Chairperson Madhabi Puri Buch addresses media on board decisions
SEBI Board Meeting LIVE updates: PE funds as sponsors of MF schemes on agenda
Sebi board may also discuss proposal allowing Private Equity (PE) funds to sponsor a mutual fund house as they can bring in strategic guidance and talent to fuel growth of the industry. The proposal comes in the backdrop of IDFC Mutual Fund getting acquired by a consortium comprising Bandhan Financial Holdings Ltd, Sovereign Wealth Fund GIC and private equity fund ChrysCapital.
SEBI Board Meeting Live Updates: What's in it for the AIFs?
In another public comment paper released in January, the market regulator sought to set up a standardised valuation approach for the investment portfolio of Alternative Investment Funds (AIFs).
SEBI has proposed objective and rigorous conditions for the appointment of a manager of an AIF, while simultaneously mandating that category-III AIFs shall be required to undertake a valuation of their investment portfolio in unlisted securities by an independent valuer. The manager shall be required to disclose to the investors of the AIF details of the valuation principle/methodology/standard opted under the stipulated guidelines for each asset class of the scheme of the AIF as well as report on any changes in the valuation principles and the impact of the said changes.
SEBI Board Meeting Live Updates: What's in it for retail investors?
The capital market regulator may look into proposals to protect the interests of retail traders and investors.
Evidencing the need to secure funds of retail investors better, SEBI, in its consultancy paper released in February: "On January 6th, the day of the last running account settlement, approximately Rs 46,000 crores of investor funds was held with brokers and CMs. Anecdotal evidence suggests that the number may be even higher on other days. It may also be noted that India’s 1355 stock brokers are not subject to all the regulatory safeguards that other client fund-accepting financial institutions are."
SEBI under Buch leadership so far
It is under the leadership of the chairperson Madhabi Puri Buch that the market regulator has instituted a slew of incisive reforms that are altering the landscape not just for institutional investors but also injecting greater accountability for market participants such as brokerages, ESG rating providers, MIIs, including stock exchanges, clearing corporations and depositories.
SEBI Board Meeting LIVE updates: Market regulator may put an end to permanent board positions
The Securities and Exchange Board of India (Sebi) may eliminate permanent board memberships in its meeting today.
In order to remedy this quandary, SEBI has proposed that as on March 31, 2024, if there is any director serving on the board of a listed entity without his / her appointment or re-appointment being subject to shareholders’ approval during the last 5 years i.e., from April 1, 2019, the listed entity shall take shareholders’ approval in the first general meeting to be held after April 1, 2024, for his / her continuation on the board of the listed entity.
SEBI Board Meeting LIVE updates
Chairperson Madhabi Puri Buch is scheduled to address media on the board's outcomes later today.
SEBI Board Meeting LIVE updates: What's on agenda
The Securities and Exchange Board of India (SEBI) is set to clear a number of proposals including categorical elimination of permanent board memberships, introducing an ASBA-like system for stock market trades and allowing private equity funds to become sponsors of mutual funds.
The regulator's Chairperson Madhabi Puri Buch is scheduled to address media on the board's outcomes later today.
