Sebi aims to boost investor confidence

Announces slew of measures including extension of the initial offering period under the Rajiv Gandhi equity savings scheme

srishti

Srishti Pandey | March 9, 2013



In a bid to revive the capital markets and boost investor confidence, Sebi on Friday announced a slew of measures including extension of the initial offering period under the Rajiv Gandhi equity savings scheme (RGESS).

During a meeting held in the capital, the Securities and Exchange Board of India approved a proposal to increase the initial offering period from 15 to 30 days for mutual fund schemes launched under the RGESS. “The Board approved the proposal to amend the SEBI (Mutual Fund) Regulations, 1996 with respect to increasing the initial offering period for RGESS eligible schemes from 15 days to 30 days,” according to a statement issued by the regulator.

In addition, the regulator has also extended the time period for refunding money and sending statement of accounts from the initial period of five working days to 15 days following the closure of initial subscription for such schemes.

The Board has also given a green signal to the SEBI (Issue and Listing of Non-Convertible Redeemable Preference Shares) Regulations, 2013 to bring in more transparency in the process of companies raising funds by issuing non-convertible redeemable preference shares in various stock exchanges which will also be applicable to banks.

“Considering the risks involved in the instrument (non-convertible redeemable preference shares), certain requirements like minimum tenure of the instruments (three years), minimum rating (“AA-” or equivalent), etc have been specified in case of public issuances. For listing of privately placed non-convertible redeemable preference shares, minimum application size for each investor is fixed at Rs 10 lakh,” the regulator said.

The regulator has also decided to cut-down on the lengthy procedural requirements for registration of stock brokers and has introduced common registration certificates across different market segments.

At present, stock brokers are required to get a separate certificate of registration from Sebi while operating in different segments of any stock exchange- equity, equity derivatives and currency derivatives, and also in different categories including trading member, trading-cum-self-clearing member and a professional clearing member. 

“With a view to simplifying and rationalising the registration requirement, the Board decided to amend the regulations for stock brokers so that there may be one certificate of registration per stock exchange for a stock broker,” Sebi said.

For the financial year 2013-2014, the regulator has decided to pay attention on imparting investor education, enhancing market surveillance capabilities and improving investor access to Sebi. “In this regard, the Board approved the opening of six more local offices at Ranchi, Raipur, Panaji, Shimla, Dehradun and Srinagar,” the regulator added.

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