SEBI Board Meeting Outcomes
In an effort to enhance the ease of doing business for market participants, the Securities and Exchange Board of India (SEBI) has implemented several regulatory changes, as discussed in their recent board meeting.
Key Approvals and Regulations
- Employee Stock Options:
- Founders can retain employee stock options post-listing if received at least one year before the IPO filing.
- Compulsory Convertible Securities (CCS):
- Exempt from a minimum one-year shareholding period, which aids companies considering reverse flipping.
- Reverse flipping involves Indian start-ups relocating their business base back to India from overseas.
- Alternative Investment Funds (AIF):
- Category I and II AIFs can introduce co-investment schemes to support capital formation in unlisted firms.
- Accredited investors can co-invest in unlisted entities through portfolio management systems (PMS).
- Angel investors are now required to be accredited investors (AI), who qualify as qualified institutional buyers (QIBs) for angel fund investments.
- Investment thresholds for angel investors are revised to ₹10 lakh - ₹25 crore from the previous ₹25 lakh - ₹10 crore.
- Delisting of PSUs:
- PSUs with over 90% government holding are allowed to delist. Five such companies currently exist.
- Other Regulatory Changes:
- Foreign portfolio investments (FPIs) exclusively investing in G-secs have relaxed compliance requirements.
- Documentation for qualified institutional placements (QIPs) has been simplified.
- Merchant banking regulations have been rationalized.
