Mumbai: The Securities and Exchange Board of India (SEBI) on Wednesday announced a set of important reforms aimed at making the Indian financial markets more efficient, inclusive, and investor-friendly.
The decisions were taken during the SEBI’s board meeting led by its Chairperson Tuhin Kanta Pandey.
One of the biggest changes is that startup founders will now be allowed to keep their employee stock ownership plans (Esops) even after their companies go public.
Earlier, founders were treated as ‘promoters’ after the IPO and were not eligible for Esops.
This rule change recognises that many startup founders accept low salaries and work for years in exchange for equity, and this move will keep them motivated to drive long-term growth.
However, to prevent misuse, the SEBI has made it mandatory to have a one-year gap between issuing Esops and filing for an IPO.
In another key decision, the market regulator has approved a new framework for the voluntary delisting of public sector undertakings (PSUs).
This means that PSUs can now be removed from the stock market more easily if shareholders approve.
Earlier, this process was considered very complicated and rarely happened. The government, which holds majority stakes in many PSUs, has been looking for strategic disinvestment options, and this new mechanism will support that effort.
The SEBI also made changes that benefit alternative investment funds (AIFs). These funds can now allow their investors to make co-investments through a separate setup called a co-investment vehicle.
This gives large investors the opportunity to invest more in the same private companies where the AIF has already invested.
The idea is to help big investors participate in promising deals more directly.
Additionally, AIF managers will now be allowed to provide advisory services to investors across different categories, even if their funds hold positions in the same listed stocks.
This gives fund managers more freedom and increases their ability to offer professional advice.
To attract more long-term foreign capital, the SEBI has also simplified the rules for foreign investors who want to invest only in Indian government bonds.
Since these bonds carry lower risk, the market regulator is easing registration and compliance requirements.
This move is expected to make India more attractive to global investors looking for stable returns.
The SEBI also discussed a possible settlement plan for brokers involved in the National Spot Exchange Limited (NSEL) case.
With more than 300 show-cause notices issued and feedback from the Securities Appellate Tribunal (SAT), the market regulator is exploring ways to resolve the matter through its consent regulations framework.
(IANS)
