The Securities and Exchange Board of India, in its board meeting on Thursday, is expected to discuss steps that may provide a boost to the markets and ensure safe and easier investment procedures for investors.
While the Sebi is expected to announce several changes in the initial public offering (IPO) guidelines, offer for sale (OFS) and Know Your Client (KYC) norms, it may also announce the revised regulations for employee stock ownership plan (ESOP).
As suggested by Sebi chairman UK Sinha earlier this month at a CII conference in Mumbai, the Capital markets regulator is expected to raise the minimum public shareholding for public sector companies from 10 per cent to 25 per cent, in line with the norms for the private sector.
Sebi is also expected to remove the anomaly in the minimum issue size of IPOs. This is expected to raise over Rs 50,000 crore from sale of excess promoter stake in state-run companies.
It might also rewrite rules on quantum of shares to be offered by companies while launching an IPOs. While currently all companies, with a post-issue capital of below Rs 4,000 crore are required to offer at least 25 per cent stake in an IPO, firms with post-issue capital of above Rs 4,000 crore are required to offer a minimum of 10 per cent. Sebi may remove this anomaly soon. Other than this Sebi may also look to increase the quota of anchor investors in IPOs.
The regulator may also look to bring a uniform KYC across the financial sector with the co-operation of all other financial regulators. This means that KYC approved by one regulator would be accepted by other regulators.
Sebi is also expected to announce the revised norms for ESOPs including proposal to allow trusts of companies to purchase their own shares or that of its subsidiary from the secondary market for employee share benefit schemes such as ESOPs or share purchase schemes (ESPS).
It had come out with a discussion paper on review of ESOP guidelines in November 2013 inviting public comments on the same. On stock-related employee benefit schemes, Sebi also proposed to cover all employee benefit schemes other than ESOP and ESPS as they were unregulated and were outside the purview of the regulator’s Employee Stock Option Scheme guidelines.
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