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Sebi to take up new corporate governance code today

Capital markets regulator Sebi will on Thursday consider a proposal for new corporate governance code for listed companies and their top executives, among other issues. The new corporate governance code would require listed companies to justify high executive salaries, put in place an orderly succession plan, adopt a whistle-blower policy for employees and limit the number of directorship a person can hold on company boards.

Various other measures to safeguard the interest of minority shareholders are also part of the proposed norms. These norms, along with an overhaul of nearly two decade-old insider trading norms, would be taken up by the Securities and Exchange Board of India in its board meet. Under the proposed norms on insider trading many new categories of persons, including public servants, regulatory officials, judiciary and government officials, dealing with unpublished price-sensitive information, are being brought under the purview of insider trading. At the same time, new norms would also seek to clearly differentiate between 'innocent mistakes' and genuine transactions of company executives from the unlawful and serious trading offences.

Besides, to help the mutual fund industry create more understanding and better positioning of products amongst investors, the market regulator will also consider a long-term policy for mutual funds, in its meeting on Thursday.

Other issues likely to be discussed include additional fund-raising avenues in capital markets, including through real estate and infrastructure investment trusts. A final decision on these fronts, however, is expected only after the government decides on tax treatment for such instruments.
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