governance and investor protection.
He listed out guidelines and procedures to be followed in case of scheme of arrangements involving a listed company.
"Now, before going to the High Court, the proposal has to come to us and Sebi would apply its mind, give its comments and then only further action can be taken," Sinha said.
He added: "This was done against the background that we had discovered in a number of instances that interest of ordinary shareholder was being compromised and there were also instances of related party transactions, which we obviously could not permit.
"The new norms also makes it mandatory for many matters concerning schemes of arrangement to require approval of the majority of minority shareholders. These are some new concepts that are very significant and give a clear-cut message to the whole world."
Earlier, regulations provided for actions like delisting or suspension of a company's shares, adjudication for levy of monetary penalty, prosecution and debarring of promoters and directors from the markets in case of non-compliance.
However, delisting or suspension was not considered an investor friendly action and therefore, it was decided that they cannot be resorted to as a matter of routine and can be used only in cases of extreme/repetitive non-compliance.
As a result, Sebi is now putting in place measures like companies being asked to get Corporate Governance rating, inspection of compliance by stock exchanges and regulators.
It has also proposed imposing penalties on the company, its directors, compliance officer and key managerial persons for non-compliance "either in spirit or letter".