Mumbai: The Sebi board is expected to discuss a slew of topics, including changes to the listing, delisting and insider trading norms, at its meeting Wednesday as the capital markets watchdog seeks to bring in stricter regulations and simpler compliance requirements.
Besides, the board is likely to deliberate upon imposing restrictions on wilful defaulters in terms of raising funds from the capital market, according to sources.
The Securities and Exchange Board of India plans to convert listing agreements into regulations, a move primarily aimed at better safeguarding investor interests while also ensuring that the framework does not become cumbersome for listed companies and others.
Sources said that changes to listing as well as delisting norms are expected to be taken up by the board.
More stringent insider trading norms, restrictions on wilful defaulters, use of secondary market infrastructure for public issues, issuance of partly paid shares and warrants by Indian companies, and amendment to delegation of powers, are also anticipated to be discussed, they added.
At present, there are separate listing agreements for different segments of the capital market.
The idea is to have a regulatory framework for consolidating the listing obligations and disclosure requirements for listed entities across all securities at one place, sources said.
To make delisting process more easier, the board would discuss changes to existing norms that would bring down the total time required for completion of voluntary delisting from the exchange in about 76 days from the current 137 days.
Among others, stock exchanges would be given five working days to give their in-principle approval for delisting.
New norms to check insider trading menace is also expected to be discussed at the board meeting. This comes against the backdrop of instances of insider trading activities not only at small companies but also at big corporates.
As part of reviewing its existing norms, the watchdog plans to impose restrictions on companies, promoters, and directors that are categorised as 'wilful defaulter' from accessing the capital market.
A one-time single registration process for depository participants to operate on both depositories is also on the anvil.
The proposal, which would replace the current practice of requiring separate registration certificate to operate in on both depositories (CDSL and NSDL), is also likely to be taken up by the board.
Stricter norms for wilful defaulters would help make sure that their exposure to the capital market is limited.
They could be barred from "taking control in another company" and that kind of mechanism would also ensure that more listed firms are protected from the promoters or management of those entities categorised as wilful defaulters.
Sebi has received representations from industry bodies and various companies to make delisting norms easier and cost-effective for them.
The main area of concern for the companies has been the norms related to offer price at which promoters are required to buy out the shares of public shareholders.
There is a view that the process can be made easier and more cost-effective for cases when promoters are forced to delist their companies on account of factors like persistent losses, long-running trading suspension and major violations to regulations.
The current delisting regulations were put in place in 2009 and facilitate removal of the securities of a listed company from a stock exchange with promoters buying out shares held by minority shareholders.
