10 Key Takeaways From SEBI Board Meet: MF changes, new IPO norms, other key things to know

Capital market regulator SEBI made several major decisions at its board’s meeting on Wednesday, December 17. Key changes include easier guidelines for mutual fund investments and IPO-bound companies, with a new set of rules for stock brokers operating on Dalal Street, with the three announcements confirming three Zee Business reports.

Here’s a point-by-point summary of 10 major takeaways from the December 17 meeting of the SEBI board:

• New stock broker regulations have been introduced, replacing the Stock Brokers Regulations, 1992. The new guidelines are organised into 11 simplified chapters, with a keen focus on making compliance easier. With significant changes in the reporting system, bourses will now act as first-line regulators for stock brokers.
• Mutual fund investing is set to become cheaper and more transparent on Dalal Street, with the regulator giving nod to the new Mutual Fund Regulations. The new guidelines replace the Mutual Fund Regulations, 1996. Among major changes is the decision to do away with expense ratio -- a key metric defining the fee that a mutual fund charges to cover its operating costs -- and introduce base expense ratio (BER). Costs like STT, GST, stamp duty and exchange fees will not be included in BER.
• New brokerage limits will apply to brokerage fees, reducing them from 8.59 bps to 6 bps in the in the spot market and from 3.89 bps to 2 bps in derivatives.

• Easier IPO guidelines -- with amendments to ICDR norms -- will bring key changes like shares held by non-promoter individuals will be locked in for six months before the IPO. Read More
• In a major relief for debt-listed companies -- listed firms that raise funds by issuing bonds or debentures, a key threshold has been raised for identifying high value debt listed entity (HVDLE). The tag will now apply at outstanding debt worth Rs 5,000 crore, instead of Rs 1,000 crore.
• Rules have been eased for companies operating in the debt market, with amendments to the NCS Regulations, 2021. These guidelines govern the issuance and listing of debt securities and other non-convertible instruments.
• Credit rating agencies (CRAs) are now allowed to rate instruments that fall under the umbrella of other regulators such as the RBI, with the scope of ratings for unlisted debt instruments expanded. A clear distinction is mandatory in rating reports and marketing between products regulated by SEBI and other regulators.
• Share transfer and related processes have been made faster and simpler. Investors are no longer required to get hold of a separate confirmation letter from the company for a host of equity-related activities. Shares will be credited directly to the investor’s demat account once verification is done.
• Similarly, physically held shares will also be easier to transfer now under a one-time window. Investors will be able to transfer the shares to their own name in digital form using the window. This will be a limited-period opportunity and will only apply to shares purchased before April 1, 2019.
• Issuers will be able to transfer unclaimed amounts of deposits and dividends to the Investor Education and Protection Fund (IEPF) under a one-time window. This option will be exercisable after seven years from the date of maturity. This will grant investors more time to claim such funds.