SEBI Board Meeting Recap: Key Decisions and Developments
SEBI Approves Regulatory Changes to Balance Ease of Doing Business with Stronger Oversight
March 23, 2024
The Securities and Exchange Board of India (SEBI) has approved a wide-ranging set of regulatory changes covering market intermediaries, foreign investors, alternative funds, and governance norms.
Key Highlights:
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- Code of Conflict Proposal: SEBI has introduced a stricter conflict-of-interest framework for its members and officials, including stricter norms around disclosures, trading restrictions, and recusals.
- FPI Settlement: Foreign Portfolio Investors (FPIs) will now be allowed to settle funds on a net basis for outright cash market transactions, reducing fund blockage and costs.
- Ease of Doing Business for REITs and InvITs: SEBI has approved measures to ease operational constraints for Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs), including allowing InvITs to hold investments in Special Purpose Vehicles (SPVs) after project completion.
- Fit & Proper Criteria: SEBI has revised the 'fit and proper person' criteria for intermediaries, clarifying that the mere filing of an FIR or chargesheet will not automatically lead to disqualification.
- Social Impact Funds: The minimum investment threshold for individual investors in social impact funds has been reduced from ₹2 lakh to ₹1,000.
- AIFs Winding Up: SEBI has introduced flexibility for Alternative Investment Funds (AIFs) in winding up schemes and surrendering registration.
Key Regulatory Changes:
| Change | Description |
|---|---|
| Code of Conflict Proposal | Stricter conflict-of-interest framework for SEBI members and officials |
| FPI Settlement | Net settlement for FPIs for outright cash market transactions |
| Ease of Doing Business for REITs and InvITs | Measures to ease operational constraints for REITs and InvITs |
| Fit & Proper Criteria | Revised criteria for intermediaries, clarifying FIR and chargesheet disqualification |
| Social Impact Funds | Reduced minimum investment threshold from ₹2 lakh to ₹1,000 |
| AIFs Winding Up | Flexibility for AIFs in winding up schemes and surrendering registration |
SEBI's Focus on Governance Practices
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SEBI has flagged the need for greater accountability and adherence to conduct standards in the recent resignation of an independent director at HDFC Bank, signaling its focus on governance practices and transparency at the board level.
Investor Takeaway
SEBI's regulatory changes aim to balance ease of doing business with stronger oversight, potentially benefiting market intermediaries and foreign investors.
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