Listed PSUs must have 25% public shareholding: Sebi
20 Jun 2014 10:51 PM GMT
Initiating a wide range of measures, capital market regulator Sebi on Thursday asked all listed PSUs to ensure at least 25 per cent public shareholding within three years and unveiled new norms for research analysts, employee stock option schemes as well as reforms to boost the primary market.
The decision, aimed at ensuring uniformity among listed entities irrespective of their promoters, would also help the government raise close to Rs 60,000 crore from the sale of shares in around 36 listed PSUs where the public shareholding is less than 25 per cent. ‘Today the Sebi board has taken some very very important decisions,’ Sebi chairman U K Sinha told reporters after the board meeting here.
Sebi has eased norms related to the size of an IPO and pricing of preferential shares while allowing anchor investors to have a greater exposure to the offering. At its board meet here on Thursday, it also approved a proposal to allow bonus shares to be sold in IPO (initial public offer) even if they have been issued within less than a year.
The board decided that all companies with a post-issue capital above Rs 4,000 crore are compulsorily required to offer at least 10 per cent stake in the IPO. In other IPOs, the minimum dilution to the public will be 25 per cent, or Rs 400 crore, whichever is lower.
‘This will remove the anomaly that a company just short of Rs 4,000 crore market capitalisation was required to dilute about Rs 1,000 crore while another company at Rs 4,000 crore market capitalisation was required to dilute only Rs 400 crore,’ the Securities and Exchange Board of India (Sebi) said in a release.
Companies that dilute less than 25 per cent in an IPO will be given three years to comply with the minimum public shareholding norms, Sebi said. ‘In order to make regulatory requirements consistent across companies irrespective of post-issue capitalisation and to facilitate mid-size issuers who may not be in need of large funds, Sebi has decided to take up the proposal with the Ministry of Finance to carry out suitable amendments to SCRR (Securities Contracts (Regulation) Rules, 1957),’ the regulator said.
To safeguard investors from manipulative reports and usher in more transparency, the board has approved detailed norms for ‘research analysts’ that include stringent disclosure requirements.
‘KYC data can be shared with other regulators’
To ensure common know-your-client (KYR) system for the entire financial sector, Sebi board on Thursday approved the proposal for sharing KYC details with entities regulated by other financial sector watchdogs.
The move, which comes after a board meeting of the capital market regulator here, would facilitate the KYC process for the investors in the entire financial sector. Currently, the facility of sharing of KYC information is available only among Sebi-registered intermediaries.
‘We have passed a resolution that the regulation will be amended that will permit other regulated entities to have access to the data,’ Sebi Chairman UK Sinha told reporters after the board meeting here.
‘So this is a move towards aligning one single KYC across the financial market. This is a first move in that direction which will be very very investor friendly,’ Sinha added.
In the meeting here, Sebi board approved the amendment to Sebi (KYC) Registration Agency Regulations, 2011 for sharing of KYC information available on the centralised system with the entities regulated by other financial sector regulators.
‘This would further facilitate the KYC process for the investors in the entire financial sector,’ the Securities and Exchange Board of India (Sebi) said in a release.
‘This will not only reduce the paper-work and bring down cost of operations for the investors as well as for the intermediaries, but will also save the investors from the hassle of getting KYC done again by the intermediaries regulated by other financial sector regulators,’ it added. The KYC information is available on the centralised KRA (KYC registration agency) system and holds records of about 1.95 crore investors.
Under the Sebi system, a client who has already done the KYC with any Sebi registered intermediary need not undergo the same process again when he approaches another intermediary.
The decision, aimed at ensuring uniformity among listed entities irrespective of their promoters, would also help the government raise close to Rs 60,000 crore from the sale of shares in around 36 listed PSUs where the public shareholding is less than 25 per cent. ‘Today the Sebi board has taken some very very important decisions,’ Sebi chairman U K Sinha told reporters after the board meeting here.
Sebi has eased norms related to the size of an IPO and pricing of preferential shares while allowing anchor investors to have a greater exposure to the offering. At its board meet here on Thursday, it also approved a proposal to allow bonus shares to be sold in IPO (initial public offer) even if they have been issued within less than a year.
The board decided that all companies with a post-issue capital above Rs 4,000 crore are compulsorily required to offer at least 10 per cent stake in the IPO. In other IPOs, the minimum dilution to the public will be 25 per cent, or Rs 400 crore, whichever is lower.
‘This will remove the anomaly that a company just short of Rs 4,000 crore market capitalisation was required to dilute about Rs 1,000 crore while another company at Rs 4,000 crore market capitalisation was required to dilute only Rs 400 crore,’ the Securities and Exchange Board of India (Sebi) said in a release.
Companies that dilute less than 25 per cent in an IPO will be given three years to comply with the minimum public shareholding norms, Sebi said. ‘In order to make regulatory requirements consistent across companies irrespective of post-issue capitalisation and to facilitate mid-size issuers who may not be in need of large funds, Sebi has decided to take up the proposal with the Ministry of Finance to carry out suitable amendments to SCRR (Securities Contracts (Regulation) Rules, 1957),’ the regulator said.
To safeguard investors from manipulative reports and usher in more transparency, the board has approved detailed norms for ‘research analysts’ that include stringent disclosure requirements.
‘KYC data can be shared with other regulators’
To ensure common know-your-client (KYR) system for the entire financial sector, Sebi board on Thursday approved the proposal for sharing KYC details with entities regulated by other financial sector watchdogs.
The move, which comes after a board meeting of the capital market regulator here, would facilitate the KYC process for the investors in the entire financial sector. Currently, the facility of sharing of KYC information is available only among Sebi-registered intermediaries.
‘We have passed a resolution that the regulation will be amended that will permit other regulated entities to have access to the data,’ Sebi Chairman UK Sinha told reporters after the board meeting here.
‘So this is a move towards aligning one single KYC across the financial market. This is a first move in that direction which will be very very investor friendly,’ Sinha added.
In the meeting here, Sebi board approved the amendment to Sebi (KYC) Registration Agency Regulations, 2011 for sharing of KYC information available on the centralised system with the entities regulated by other financial sector regulators.
‘This would further facilitate the KYC process for the investors in the entire financial sector,’ the Securities and Exchange Board of India (Sebi) said in a release.
‘This will not only reduce the paper-work and bring down cost of operations for the investors as well as for the intermediaries, but will also save the investors from the hassle of getting KYC done again by the intermediaries regulated by other financial sector regulators,’ it added. The KYC information is available on the centralised KRA (KYC registration agency) system and holds records of about 1.95 crore investors.
Under the Sebi system, a client who has already done the KYC with any Sebi registered intermediary need not undergo the same process again when he approaches another intermediary.
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