New Delhi: The Securities and Exchange Board of India (Sebi) may ease access norms for investment by foreign portfolio investors (FPIs) and bringing a new framework to strengthen the governance structure for mutual funds, senior officials said Tuesday.
Sebi also plans to review the framework for credit rating agencies as it seeks to check the menace of “rating shopping" and “pick-and-choose" approach in their actions. Furthermore, the regulator is looking at providing an additional method for listed entities to achieve the minimum public shareholding requirement.
These issues would be taken up at the Sebi board meeting scheduled for Thursday, senior officials said.
With regard to FPIs, Sebi may consider simplifying regulatory requirements pertaining to access norms, with a view to easing direct registration for overseas investors.
For credit ratings agencies, Sebi will review the norms governing them on the basis of public comments. It had come out with a consultation paper in this regard in September. According to that proposal, no credit rating agency should “directly or indirectly hold more than 10% of shareholding and/ or voting rights in another credit rating agency and shall not have representation on the board of the other credit rating agency". The minimum net worth threshold for the rating agencies has been proposed to be raised to Rs50 crore from the current level of Rs5 crore.
In addition, the regulator is considering to revisit its directive on “loan default disclosure", which will make it mandatory for listed companies to inform stock exchanges about such issues as soon as they occur.
Earlier, Sebi had put off implementation of its directive “until further notice" that required listed firms to inform exchanges if they default on loan payments to banks and financial institutions, just a day before it was supposed to be implemented on 1 October.
Sebi may create a full-time post of chief vigilance officer. Further, it plans to make amendments to Investment Advisor norms on the basis of consultation paper that was issued in June this year. Also, it is looking to amend regulation with respect to qualified institutional placements (QIPs).