SEBI board meet: Here's all you need to know

Markets regulator SEBI will be looking to tackle a host of issues at its board meeting on November 20.

Here are some of the major talking points:

Rights issue process

Based on a long-pending demand of making the rights issue process more efficient, the market regulator may discuss a significant reduction in time taken to process a rights issue to 31 days or less, from the current 55-58 day framework.

As it stands now, a rights issue process, through the fast track route, typically takes 55-58 days and excludes the period taken for completing the letter of offer and any statutory and regulatory approvals.

This has been under discussion as issuers perceive a higher exposure to price risk due to current rights issue process.

To this effect, the regulator also plans to reduce the notice period under Regulation 42 of the Listing Obligations and Disclosure Requirements (LODR) from seven working days to three.

The requirement to determine the issue price before the record date is expected to continue.

SEBI is also expected to approve electronic modes of receiving entitlements, processing, payment, and settlement in a rights issue, including the use of ASBA (Applications Supported by Blocked Amount) as the payment mode, among others to reduce the post-issue timeline by 11 days.

Hike in PMS investment limit to Rs 50 lakh

Among the key proposals it is planning for PMS, the board will consider increasing the minimum investment limit from Rs 25 lakh to Rs 50 lakh and raising the minimum net worth requirement from Rs 2 crore to Rs 5 crore for a company to run a PMS fund, sources told Moneycontrol.

PMS funds are alternative funds that can follow riskier investment strategies compared to traditional mutual funds. Further, the higher net worth requirement shall be a deterrent to non-serious players during new applications and will put pressure on fringe players coexisting with serious money managers, the source added.

SEBI is also planning to increase disclosure requirements by PMS and may increase supervision of distributors of PMS funds.

Tighter norms for auditors

The regulator is also looking to streamline regulations for auditors, especially after the string of accounting scandals that have hit India Inc. SEBI has regulatory oversight over audit issues related to listed companies while everything else is overseen by ICAI and the NFRA.

Norms that the regulator may tightening include auditors citing proper reason if they are resigning from a firm. If the auditor has audited three of the firm's quarterly results, it should go on to complete the fourth quarter audit before resigning.

A new codified regulation prescribing specific duties and liabilities of auditors would help clear the air with respect to the jurisdictional reach of SEBI over the auditors.