Sebi unveils reform measures; to issue new circular on FPI norms

Apart from this, the regulator announced the framework for enhanced market borrowings by large corporates. As per the new rules, any large corporate, covered under its framework will now have to intimate to the stock exchange that they are covered under the framework and will raise 25 per cent of their incremental borrowings for that year through the bond market.

For the initial two years of implementation of the framework, a “comply or explain” approach will be applicable. In the event of non-compliance, the reasons will have to be disclosed as part of the “continuous disclosure requirements” to the stock exchanges. From the third year of implementation, the requirement of 25 per cent of incremental borrowing through bond market will be tested for a contiguous block of two years. At the end of two-year block, if there is any deficiency in the requisite bond borrowing, a monetary penalty/fine of 0.2 per cent of the shortfall will be levied, said the regulator.

In a bid to open up the commodity derivatives markets to the foreign participants, Sebi also approved the regulatory framework for permitting foreign entities having actual exposure to Indian commodity markets, to participate in the domestic commodity derivatives markets.

The board approved the amendments to the stock exchanges and the Clearing Corporations Regulations, to enable interoperability among clearing corporations (CCPs). The regulator also approved the framing of the Settlement Proceedings Regulations. Sebi has approved amendments to Prohibition of Fraudulent and Unfair Trade Practices (PFUTP) Regulations and Prohibition of Insider Trading (PIT) regulations. The amendments to the PFUTP Regulations relate to definition of ‘dealing in securities’ expanding the scope of the regulations to include employees and agents of intermediaries. Amendments to the PIT Regulations include bringing further clarity on sharing of unpublished price sensitive information (UPSI) for due diligence or legitimate purposes, the creation of a database of persons with whom UPSI is shared among other things.