Making it easier for companies to raise funds through genuine equity or debt offers, Sebi today unveiled a slew of measures to bring to book those running illegal money-pooling schemes and indulging in other fraudulent activities.
At the same time, Sebi has also decided to ensure faster refund of money to investors and put in place necessary checks against any misuse of its newly granted powers with regard to conduct of search and seizure of fraudsters and manipulators.
Announcing several decisions after a board meeting here today, the Securities and Exchange Board of India (Sebi) also said that the government has decided to provide tax treatment similar to FIIs to Foreign Portfolio Investors (FPIs), a newly created class of overseas investors.
The move is aimed at bringing in clarity for the new FPI regime, under which all foreign investors have been classified into three categories based on their risk profile from low to highest risk.
With regard to raising of funds through Initial Public Offer (IPO) of equity shares, Sebi board approved a proposal to do away with mandatory IPO grading, while a host of companies have been allowed to file shelf prospectus for debt offers that would be valid for multiple offers within a year.
To ensure greater efficacy in exercise of its new powers, Sebi's board cleared new norms for its search and seizure operations, settlement proceedings, refund to investors and crackdown on illicit money-pooling schemes.
The new norms seek to ensure that sufficient safeguards are put in place to avoid any misuse of its new powers and the required privacy is granted to concerned entities.
At the same time, detailed regulations have also been put in place for settlement of administrative and civil proceedings in a transparent manner, while ensuring that serious offences like insider trading are kept out of settlement window.
All these new measures would come into force after being notified separately by Sebi in the coming days.
Many of these decisions are related to the promulgation of an ordinance by the government for grant of greater powers to Sebi to check mushrooming of illegal money-pooling schemes across the country and to take strict actions against fraudsters and market manipulators.
The board is also believed to have discussed matters like new Corporate Governance Code for listed companies, revision of insider trading norms and a new framework for Real Estate Investment Trusts (REITs). However, a final decision is yet to be taken on