In its upcoming board meeting scheduled on Friday i.e March 15,2024, the Securities and Exchange Board of India (SEBI) is set to deliberate on several regulatory measures aimed at facilitating foreign investments and initial public offerings (IPOs).
The discussions are expected to encompass regulations concerning foreign portfolio investors (FPIs), alternative investment funds (AIFs), portfolio management services (PMS), and IPO procedures.
FPIs and AIFs
SEBI officials are anticipated to review proposals aimed at streamlining the ease of doing business for foreign investors, particularly FPIs, AIFs, and PMS providers.
Notably, discussions may revolve around easing disclosure requirements for FPIs, potentially exempting them from certain additional disclosure mandates if their holdings in a company remain below a specified threshold.
Moreover, SEBI is likely to consider permitting Category I & II AIFs to pledge shares of investee companies to raise debt, a move that could enhance participation in sectors like infrastructure. Current regulations restrict these AIF categories from leveraging except for temporary funding needs.
Furthermore, SEBI may propose mandatory registration of PMS distributors with the Association of Portfolio Managers in India (APMI) to enhance oversight and potentially introduce digital onboarding of clients for PMS services.
T+0
Another significant agenda item for the meeting is the discussion surrounding the implementation of T+0 trade cycle settlement. SEBI had earlier proposed moving to T+0 settlement, enabling trades to be settled on the same day, and details regarding the implementation of this system are expected to be shared.
IPO
Regarding IPOs, SEBI might explore granting promoters additional avenues to maintain the mandatory 20% minimum promoters’ contribution post-listing and allowing flexibility for companies to adjust the issue size after filing draft papers.
While specific measures concerning the recent market concerns, especially regarding midcap and smallcap stocks, are not anticipated, market observers will keenly await cues from SEBI Chief Madhabi Puri Buch during the meeting.