SEBI Board Meeting Highlights: New Delisting Rules, AIF, NGOs, and Index Providers
SEBI Delays Decision on New Delisting Regulations Due to Insufficient Data
The Securities and Exchange Board of India (SEBI) board recently announced a delay in approving new delisting regulations. The board cited a lack of sufficient data as the reason for this decision. SEBI Chairperson, Madhabi Puri Buch, stated that the data available during the board meeting held in Mumbai was inadequate to reach a conclusive decision on the new regulations.
Introduction of Regulatory Framework for Index Providers
SEBI has introduced a regulatory framework for index providers. This framework aims to ensure transparency and accountability in the governance and administration of financial benchmarks in the securities market. The market regulator recognizes the importance of establishing clear guidelines for index providers to maintain the integrity of the market.
Flexibility for NPO Fundraising
SEBI’s board has approved measures to provide flexibility for not-for-profit organizations (NPOs) in raising funds through the social stock exchange. To boost NPO fundraising on the Social Stock Exchange (SSE), SEBI has reduced the minimum issue size for public issuance of Zero Coupon Zero Principal Instruments (ZCZP) from Rs. 1 crore to Rs. 50 lakh. The minimum application size has also been reduced from ₹2 lakh to ₹10,000. Additionally, NPOs can now disclose their past social impact reports in their fundraising documents. SEBI aims to expand the eligibility for registration and fundraising through the issuance and listing of ZCZP on the SSE by allowing entities registered under section 10(23C) and 10(46) of the Income Tax Act.
Regulation of Online Platforms for Small and Medium REITs
SEBI has decided to regulate online platforms that offer fractional ownership of real estate assets. These platforms will be required to operate under the framework for small and medium Real Estate Investment Trusts (REITs). This step aims to ensure proper oversight and governance in the real estate sector.
AIF Regulations and Dematerialization of Investments
SEBI has extended the mandate for the appointment of a custodian to all Alternative Investment Funds (AIFs). Previously, this requirement only applied to Category III AIFs and Category I and II AIFs with a corpus exceeding ₹500 crore. Starting from September 2024, all fresh investments made by an AIF will be held in dematerialized form. This move is aimed at enhancing transparency and investor protection in the AIF sector.
SEBI’s Warning on Equity Derivatives Trading
Following the board meeting, SEBI Chairperson Madhabi Puri Buch expressed concern over investors losing money in equity derivatives trading. Buch emphasized that it is SEBI’s responsibility to provide warnings regarding such trading practices. Investors are urged to exercise caution and consider long-term investment prospects to mitigate potential risks.
In conclusion, SEBI’s board meeting highlighted key decisions on new delisting regulations, regulatory frameworks for index providers, flexibility for NPO fundraising, regulation of small and medium REITs, AIF regulations, and dematerialization of AIF investments. SEBI remains committed to ensuring transparency, accountability, and investor protection in the Indian securities market.
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