look news india
About 19 decisions were taken in the board meeting of Securities and Exchange Board of India (SEBI) held on Wednesday. It also includes strict listing rules for small, medium enterprises (SMEs). Rules for real estate investment trusts (REITs) and infrastructure investment trusts (INVITs) were relaxed. The definition of Unpublished Price Sensitive Information (UPSI) has been further expanded. To prevent a rosy picture being falsely presented by some SMEs to attract investors, it is now mandatory that the operating profit of SMEs should be Rs 1 crore in two out of three years. The lock-in period of promoters has also been permitted to be phased out from one year to more than two years. The offer for sale (OFS) should not exceed 20 per cent of the total issue size and for normal corporate matters the amount is capped at 15 per cent. Lock-in on promoters’ holding in excess of Minimum Promoter Contribution (MPC) will be released in a phased manner. That means, the lock-in of 50 percent promoters on stake more than MPC will be released after one year. The lock-in for the remaining 50 per cent promoters holding more than the MPC will be released after two years. SEBI has also approved the formation of a performance verification agency called Past Risk and Return Verification.
Important decisions taken by SEBI
SME IPO:
Operating profit of the issuer should be Rs 1 crore for two out of three years
Offer for sale (OFS) should not exceed 20 per cent of the total issue size
Merchant Banker:
Only activities falling within the purview of SEBI are allowed
Wide UPSI Scope:
This includes 17 out of 27 physical phenomena that are not covered
Patrons’ Reviews:
Maintaining net worth of Rs 75 crore
MF to credit NFO funds within 30 days
Rules for real estate investment trusts (REITs) and infrastructure investment trusts (INVITs) relaxed for business obligations and sustainability reporting