Aiming to facilitate ease of doing biz, Sebi to tweak norms for bourses, other MIIs

To facilitate ease of doing business as well as simplify compliance requirements, Sebi's board on Friday gave its nod for amendments to regulations for alternative investment funds and market infrastructure institutions, including stock exchanges.

The board, at its meeting here, discussed existing provisions related to stock exchanges and clearing corporations, depositories and participants.

In order to "facilitate ease of doing business in Market Infrastructure Institutions (MIIs)", the board cleared two proposals, including doing away with the requirement of seeking Sebi's post-facto approval for acquisitions between 2-5 per cent shareholding for all eligible shareholders, the regulator said in a release.

The stock exchanges, clearing corporations and depositories would have to put in place appropriate mechanism to ensure compliance with fit and proper criteria under Sebi norms.

"The provision applicable to listed stock exchanges/ depositories with regard to determination of 'fit and proper' status of persons acquiring less than two per cent of its shareholding shall also be made applicable to unlisted stock exchanges/ depositories," the release said.

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Further, the watchdog would amend the regulations governing Alternative Investment Funds (AIFs) in order to "simplify and rationalise compliance requirements" as well as provide investment flexibility and streamline regulatory processes.

AIFs under Category I, Venture Capital Funds (VCFs) would have to invest at least 75 per cent of investable funds in unlisted equity shares and equity linked instruments of venture capital undertakings or in companies listed or proposed to be listed on a SME exchange or SME segment of an exchange.

"The existing investment restrictions on the residual portion of investable funds of VCFs have been done away with," the release said.

Further, Sebi said the minimum grant of Rs 25 lakh stipulated for Category I AIFs -- social venture funds -- would not apply to grants received from accredited investors.

"AIFs can also issue partly paid up units to investors to represent the portion of committed capital invested," it said.

Besides, AIFs would have to file private placement memorandum with Sebi through registered merchant bankers.