Sebi takes steps to ensure more transparency in mkt

Mumbai In its bid to ensure more transparency and timely disclosure of material events by listed entities, Sebi announced a host of measures post its board meet here on Wednesday. The capital markets regulator decided to amend norms whereby a quantitative threshold will be introduced for determining the materiality of events.

Besides, there will be a ‘stricter timeline for disclosure of material events/ information for which decision has been taken in the meeting of the board of directors (within 30 minutes) and which are emanating from within the listed entity (within 12 hours),’ Sebi said in a release on Wednesday.

Moreover, the regulator approved proposals to put an end to permanent board seats as well as to curb special rights for certain shareholders. Fund houses will soon get a backstop facility for the purchase of corporate debt securities in times of stress, while private equity funds will be able to sponsor these asset managers. Also, a facility similar to the Application Supported by Blocked Amount (ASBA) for initial public offerings (IPOs) will be made available to investors for secondary market trading. These were among the decisions that the SEBI said.

The facility is based on blocking of funds for trading in secondary market through UPI. The said facility shall be optional for investors as well as stock brokers. The framework seeks to achieve the following benefits, it added.

Sebi has amended Stock Brokers Regulations to institute a formal mechanism for prevention and detection of fraud or market abuse by stock brokers. It has introduced a framework to provide for an institutional mechanism for prevention and detection of fraud or market abuse by stock brokers.

Corporate Debt Market Development Fund (CDMDF) in the form of an Alternative Investment Fund (AIF) will be set up to act as a Backstop Facility for purchase of investment grade corporate debt securities during times of stress to instill confidence amongst the participants in the Corporate Bond Market and to generally enhance secondary market liquidity.

For ease of monitoring and administration by stakeholders and for the purpose of investor protection against operational and fraud risk, the Board approved mandating that all new schemes going forward and existing schemes of AIFs with corpus more than Rs 500 crore shall dematerialise their units by October 31.

Existing schemes of AIFs with corpus less than Rs 500 crore shall dematerialise their units by April 30, 2024.