The Securities and Exchange Board of India (“SEBI”), in its meeting held on November 20, 2019, took, inter alia, the following decisions:
SEBI approved the issuance of the SEBI (Portfolio Managers) Regulations, 2019 which have, inter alia, the following salient features:
a. Net worth requirement of portfolio managers to be enhanced from INR 2,00,00,000 (Indian Rupees two crores) to INR 5,00,00,000 (Indian Rupees five crores).
b. Minimum investment by clients of portfolio managers to be increased from INR 25,00,000 (Indian Rupees twenty five lac) to INR 50,00,000 (Indian Rupees fifty lac).
c. Discretionary portfolio managers to invest only in listed securities, money market instruments, units of mutual funds and such other securities/ instruments as specified by SEBI from time to time.
d. Non-discretionary/ advisory portfolio managers to invest not more than 25% (twenty five percent) of their assets under management (AUM) in unlisted securities.
Amendments to the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“LODR Regulations”) were approved by SEBI with an objective to significantly reduce the timeline for the completion of the rights issue, as well as introduce the dematerialization and trading of rights entitlements (“REs”).
The key proposals approved by SEBI are as follows:
a. Reduction in the timeline for completion of the rights issue from the current ~T+55 days to ~T+31 days.
b. Introduction of dematerialized REs and trading of REs on stock exchange platform.
c. Shareholders holding shares in physical form will be required to provide details of demat account for credit of REs.
d. ASBA facility made mandatory for all investors applying to rights issue.
The LODR Regulations requires the top 500 (five hundred) listed entities based on market capitalization, as on March 31 of every financial year, to include Business Responsibility Reporting (BRR) as part of their annual reports. It was decided to increase such requirement to top 1,000 (one thousand) listed entities.
In case of any default in repayment of principal or interest on loans from banks or financial institutions which continues beyond a period of 30 (thirty) days from the pre-agreed payment date, listed entities shall be required to, promptly, but not later than 24 (twenty four) hours from the 30th (thirtieth) day, disclose the fact of such default.
SEBI has also issued a circular dated November 21, 2019 in this regard.
The aforesaid decisions shall be applicable from January 1, 2020.
This update has been contributed by Aastha (Partner) and Shradha Rakhecha (Associate).
7A, 7th Floor, Tower C, Max House,
Okhla Industrial Area, Phase 3,
New Delhi – 110020
The rules of the Bar Council of India do not permit advocates to solicit work or advertise in any manner. This website has been created only for informational purposes and is not intended to constitute solicitation, invitation, advertisement or inducement of any sort whatsoever from us or any of our members to solicit any work in any manner. By clicking on 'Agree' below, you acknowledge and confirm the following:
a) there has been no solicitation, invitation, advertisement or inducement of any sort whatsoever from us or any of our members to solicit any work through this website;
b) you are desirous of obtaining further information about us on your own accord and for your use;
c) no information or material provided on this website is to be construed as a legal opinion and use of this website will not create any lawyer-client relationship;
d) while reasonable care has been taken in ensuring the accuracy of the contents of the website, Argus Partners shall not be responsible for the results of any actions taken on the basis of information provided in this website or for any error or omission in the website; and
e) in cases where the user has any legal issues, the user must seek independent legal advice.