SEBI reaches out to market participants; discusses capital raising, disclosure issues

Regulator Sebi on Wednesday discussed several issues pertaining to raising of capital and corporate debt market with corporates as well as promised to look into the challenges being faced by them due to the COVID-19 crisis. In a conference call with the Federation of Indian Chambers of Commerce and Industry (FICCI), Sebi Chairman Ajay Tyagi apprised the industry leaders of various steps already taken by the market regulator and promised to look into the issues raised by them.

This was part of the series of meetings that the Securities and Exchange Board of India (Sebi) is having with various stakeholders, the regulator said in a statement.

Sebi had earlier interacted with the Confederation of Indian Industry (CII).

FICCI appreciated the proactive efforts being taken by Sebi in the wake of developments related to COVID-19.

Sangita Reddy and Sunil Sanghai were among the representatives of FICCI who attended the conference call, while Tyagi was also joined by other senior officials from Sebi.

Several issues concerning the industry in light of the lockdown due to COVID-19 were discussed in the meeting. This included raising  of capital, corporate debt market and disclosures.

Tyagi said Sebi has been responding to market developments through appropriate measures in consultation with various stakeholders.

He further said Sebi is in regular touch with the government, Reserve Bank of India and other regulators on various issues.

Sebi has taken several proactive measures in easing the corporates' regulatory compliance burden by introducing relaxations like extension of date for filings to be made to stock exchanges like quarterly and annual financial results, corporate governance reports, shareholding pattern, among others, for listed entities.

The regulator has also granted a one-time relaxation in primary market fund raising norms to make it easier for companies to raise capital amid the COVID-19 pandemic.

Rights issues are now considered successful if the minimum subscription received is 75 per cent, as opposed to 90 per cent earlier.

Further, in case of fast track issues, the eligibility criteria of average market capitalisation of public shareholding of the issuer has been relaxed to Rs 100 crore from the earlier Rs 250 crore.

Sebi has also extended the validity of observation letters issued by it for initial public offerings (IPOs) and rights issues as well as new fund offer (NFO) documents for mutual funds by six months.

Besides, Sebi has given relaxations for market intermediaries such as stock brokers, depository participants and share transfer agents (RTAs).

Deadlines for implementation of stewardship code for mutual funds, overhaul of regulations governing portfolio management services (PMS), mutual funds and alternative investment fund have been extended too.

To ensure orderly functioning of the market, Sebi has put in place adequate risk management measures.

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