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The Latest Securities Market Developments in Mumbai
In a recent development in Mumbai, the Securities and Exchange Board of India (Sebi) has approved a series of relaxations for foreign portfolio investors, alternative investment funds, and entities looking to raise funds through initial share sales. These measures aim to enhance the ease of doing business in the securities market.
Uniform Approach for Market Rumour Verification
Sebi has also given the green light for a uniform approach to verifying market rumours by entities listed on the stock exchange. This move is geared towards ensuring transparency and accuracy in market information dissemination.
Testing T+0 Settlement Mechanism
As part of a pilot initiative, Sebi will launch a Beta version for a limited number of scrips and brokers to test the feasibility of the optional T+0 settlement mechanism. Stakeholder consultations will be ongoing to assess the effectiveness of this new settlement system.
Exemptions and Timelines
Furthermore, Sebi has exempted additional disclosure requirements for FPIs with significant India equity assets under management in a single corporate group, subject to specific conditions. The regulator has also relaxed timelines for the disclosure of material changes by FPIs, streamlining the reporting process.
Enhancing Compliance and Due Diligence
Sebi has mandated that Alternative Investment Funds (AIFs) and their key personnel conduct specific due diligence on investors and investments to ensure compliance with financial regulations. This measure is aimed at fostering sustainable capital formation and preventing regulatory circumvention.
Facilitating IPOs and Fundraising
To facilitate ease of doing business for companies seeking to go public or raise funds, Sebi has eliminated the requirement for a 1% security deposit in public/rights issues of equity shares. Additionally, certain entities will be permitted to contribute towards minimum promoters’ contribution without being classified as promoters.
Ongoing Compliance Requirements
Sebi has made changes to compliance requirements for listed entities, basing market capitalization-related provisions on the average market capitalization over six months. This shift aims to provide greater flexibility and stability in compliance obligations for listed companies.
Other Regulatory Updates
Sebi has extended the timeline for the mandatory applicability of listing norms for High-Value Debt Listed Entities (HVDLEs) until March 31, 2025, providing additional time for compliance. The regulator has also approved its budget for the financial year 2024-25, ensuring operational continuity and efficiency.
These regulatory developments underscore Sebi’s commitment to fostering a transparent, efficient, and investor-friendly securities market in Mumbai and beyond.
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