In order to address the gaps in availability of information with respect to defaults, the Board has decoded that in case of default in repayment of principal or interest on loans from banks or financial institutions which continues beyond 30 days from the pre-agreed payment date, listed entities shall, promptly, but not later than 24 hours from the 30th day, disclose the fact of such details.
SEBI Board Meeting
The SEBI Board met in Mumbai today and took the following decisions:
I. Issuance of SEBI (Portfolio Managers) Regulations, 2019
SEBI had constituted a Working Group to review the SEBI (Portfolio Managers)
Regulations, 1993 to suggest steps to be taken to safeguard the interest of
investors and development of the investment product.
Public comments were invited on the recommendations of the Working Group
through a consultative paper. The Board, after considering the recommendations
of the Working Group, public comments received and proposals made thereon for
amendment to the extant SEBI (Portfolio Managers) Regulations, approved
issuance of SEBI (Portfolio Managers) Regulations, 2019.
The salient features of the proposed SEBI (Portfolio Managers) Regulations, 2019
1. To enhance the eligibility criteria and to define the role of Principal Officer
clearly. The enhanced eligibility criteria to be applicable to any employee with
decision making authority relating to management of the clients’ portfolios.
2. A Portfolio Manager to mandatorily employ minimum one person with defined
eligibility criteria in addition to Principal Officer and Compliance Officer.
3. Net-worth requirement of Portfolio Managers to be enhanced from INR 2
Crores to INR 5 Crores. Existing Portfolio Managers to meet the enhanced
requirement within 36 months
4. Minimum investment by clients of Portfolio Managers to be increased from INR
25 lakhs to INR 50 lakhs. Existing investments of clients may continue as such
till end date of the PMS Agreement or as specified by the Board.
5. 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.
6. Non-discretionary/ Advisory Portfolio Managers to invest not more than 25%
of their AUM in unlisted securities.
7. To make the appointment of custodian mandatory for all the Portfolio
Managers except for those providing only advisory services to clients.
8. To restrict off market transfers from/to clients’ accounts with certain exceptions
to facilitate operational convenience.
II. Review of Rights Issue process
The Board has approved the proposals with respect to Rights Issue process and
consequential amendments to the SEBI (Issue of Capital and Disclosure
Requirements) Regulations, 2018 (“ICDR Regulations”) and SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015 (“LODR
Regulations”) 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 the Board are as follows:
1. Reduction in the timeline for completion of the Rights Issue from the current
~T+55 days to ~T+31 days.
2. Introduction of dematerialized REs and trading of REs on stock exchange
3. Shareholders holding shares in physical form will be required to provide details
of demat account for credit of REs.
4. ASBA facility made mandatory for all investors applying to Rights Issue.
III. Extension of Business responsibility reporting to top one thousand listed
entities by market capitalization
The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
(“LODR Regulations”) require that the top five hundred listed entities based on
market capitalization, as on March 31 of every financial year shall include Business
Responsibility Reporting (BRR) as part of their annual reports.
The Board upon deliberations, approved a proposal to extend the applicability of
Business Responsibility Reporting (BRR) to top one thousand listed entities.
IV. Disclosure by listed entities of defaults on payment of interest / repayment
of principal amount on loans from banks / financial institutions
In order to address the gaps in availability of information with respect to defaults,
the Board has, inter-alia, decided that in case of any default in repayment of
principal or interest on loans from banks or financial institutions which continues
beyond 30 days from the pre-agreed payment date, listed entities shall, promptly,
but not later than 24 hours from the 30th day, disclose the fact of such default.
These provisions shall be applicable from January 01, 2020.
November 20, 2019