Capital market regulator Sebi is likely to discuss tomorrow new Corporate Governance Code for listed companies and also certain new measures like real estate investment trusts or REITs for the benefit of market.
The Securities and Exchange Board of India (Sebi) board is also likely to discuss new insider trading norms suggested by Justice NK Sodhi and a proposal to allow real estate REITs in India in a move to attract more investments into the capital market, sources said. The regulator would seek board approval for the new code, which is being put in place after taking into account public comments to draft corporate governance norms released by Sebi earlier this year along with related provisions in the new Companies Act, 2013. These proposals are expected to come up for discussion during the Sebi board meeting tomorrow in Mumbai.
Regarding Corporate Governance Code, the discussion paper was floated in January and the draft norms also seek to grant greater oversight by minority shareholders and independent directors and check any unjustifiable payments to related parties.It has also proposed to introduce a new concept of 'Corporate Governance Rating' by independent agencies to monitor the level of compliance by listed companies, in addition to regular inspection by Sebi and stock exchanges.
The discussion paper also talked about a greater alignment of CEO salaries with the performance and goals of the company and also a mandatory disclosure of ratio of remuneration paid to each of their directors and their median staff salary. Similar provisions have been made in the new Companies Act.
As per the paper "on average, the remuneration paid to CEOs in certain Indian companies are far higher than the remuneration received by their foreign counterparts and there is no justification available to that effect". The regulator's board would discuss new norms on insider trading. However, Sebi has sought public comments till December 31 before putting in place final regulations in this regard.
According to new rules on insider trading, public servants and persons holding statutory positions would be prohibited from trading in listed securities of companies whose matters are being handled by them, thus giving them access to non-public price sensitive information. These norms have been proposed by a committee formed by Sebi under the chairmanship of Justice Sodhi in March this year.
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