Corporate Updates – 24-03-2015

SEBI

SEBI in its Board Meeting held on Sunday March 22, 2015 has approved the various proposals for improving the governance and transparency in the working of Listing Entities. Some of the proposal as approved by the SEBI are as under :–

1. SEBI (International Financial Service Centre) Guidelines, 2015 : These guidelines facilitate and regulate financial services related to securities market in an International Financial Service Centre set up under Special Economic Zone Act, 2005

2. Conversion of Debt into Equity by Banks and Financial Institutions : For reviving distressed listed borrowers and providing flexibility to lending institutions to acquire control over the company compliance with provisions of SEBI (ICDR) Regulations, 2009 and SEBI (SAST) Regulations, 2011 have been relaxed on conversion of debt into equity. Key Changes are as follows:-

a. Issue price would decided in accordance with prescribed fair price formula subject to allotment price being not being less than the face value of shares

b. Other requirements will be available if conversion is undertaken as per the SDR (Strategic Debt Restructuring) Scheme of RBI.

3. Review of Continuous disclosure requirement for listed Entities : With the view to enable investors to make informed decisions, SEBI has reviewed the requirements relating to disclosure being made by the listed entities on a continuous basis under the proposed SEBI (Listing Obligations and Disclosure Requirements) Regulations. Key changes include the following :-

1. The listed entity to make disclosure of all events/ information First to stock exchange(s) and not later than 24 hours of occurrence of event/information.
2. Disclosure of outcome of board meeting to be given in 30 minutes of its closure (It appears that outcome for all board meeting will be required to be given instead of selected agenda items as per the existing norms).
3. In addition to making disclosure at the time of occurrence and after the cessation of an event, now updation of disclosure on material developments shall also be made at regular intervals till conclusion of event.
4. Listed entity to disclose all material information/events on its website and such information to be hosted for a minimum period of 5 years.
5. Listed entity to disclose all events pertaining to its subsidiaries which are material for Listed entity.
6. The Board of Listed entity has frame policy for determination of materiality of an event/ information and disclose the same on website

4. SEBI (Issue and Listing of Debt Securities by Municipality) Regulations, 2015 : These regulations provide for issuance and listing of debt securities by municipalities. These regulations are in line with the Government of India guidelines for issue of tax free bonds by Municipalities. Key features of the regulations are as follows :-

a. Public issue can only be made for revenue bonds. Private placement can be for general obligation bonds or revenue bonds.

b. Issuer to contribute minimum 20% of the total project cost. The contribution shall be made from their internal resources or grants.

c. Mandatory credit rating for all issues . Public issue bonds to be of minimum investment grade.

d. Minimum tenure of 3 years

e. Municipality should not have had defaulted in repayment of loans or debt securities in last 1 year.

f. Municipality should not have had negative net worth in any of the last 3 years.

5. Amendment to SEBI (Mutual Fund) Regulations 1996 regarding managing/ advising of offshore pooled funds by local fund managers : Restrictions on domestic fund managers for managing offshore funds relaxed, where they are managing offshore funds belonging to Category I FPIs and appropriately regulated broad based Category II FPIs. This will enable the local fund managers to manage offshore funds effectively and to garner more offshore business in future.