Capital markets regulator SEBI took a series of significant decisions at its board meeting held on Wednesday, December 17. The key measures include relaxed norms for mutual fund investments and IPO-bound companies, along with a fresh regulatory framework for stock brokers operating on Dalal Street
Key highlights of the meet:-
SEBI has rolled out new stock broker regulations, replacing the Stock Brokers Regulations, 1992. The updated framework is structured into 11 streamlined chapters aimed at simplifying compliance, with stock exchanges now designated as the first line of regulatory oversight for brokers following major changes to the reporting mechanism.
Mutual fund investing on Dalal Street is expected to become more affordable and transparent after the regulator approved the new Mutual Fund Regulations, which replace the 1996 rules. A key change is the replacement of the traditional expense ratio with a Base Expense Ratio (BER), under which costs such as STT, GST, stamp duty, and exchange fees will be excluded.
Additionally, revised brokerage caps have been introduced, lowering fees from 8.59 basis points to 6 basis points in the cash segment and from 3.89 basis points to 2 basis points in the derivatives market.
Markets regulator SEBI cleared a sweeping revamp of mutual fund rules, revising the expense ratio framework and capping brokerage charges to enhance transparency.
SEBI has simplified IPO norms through amendments to the ICDR regulations, introducing key changes such as a six-month lock-in for shares held by non-promoter individuals prior to an IPO.
Providing major relief to debt-listed companies—firms that raise funds through bonds or debentures—the regulator has raised the threshold for classification as a High Value Debt Listed Entity (HVDLE) to outstanding debt of INR 5,000 crore from the earlier INR 1,000 crore.
Rules governing the debt market have also been relaxed through amendments to the NCS Regulations, 2021, which oversee the issuance and listing of non-convertible securities and other debt instruments.
Credit rating agencies (CRAs) have been permitted to rate instruments regulated by other authorities such as the RBI, with the scope of ratings for unlisted debt instruments widened. However, rating reports and marketing material must clearly differentiate between products regulated by SEBI and those overseen by other regulators.
SEBI has also streamlined share transfer and related procedures. Investors will no longer need to obtain separate confirmation letters from companies for various equity-related transactions, as shares will be credited directly to their demat accounts after verification.
Additionally, a one-time window has been introduced to facilitate the transfer of physically held shares into digital form in the investor’s own name. This limited-period facility will apply only to shares purchased before April 1, 2019.
Finally, issuers will be allowed to transfer unclaimed deposits and dividend amounts to the Investor Education and Protection Fund (IEPF) under a one-time window, exercisable seven years after maturity. This move gives investors a longer period to claim their funds.
