After a board meeting, Chairman C B Bhave told reporters that decision on on the new Takeover Code has been deferred. The Takeover Code relates to changes in a host of regulations governing the merger and acquisitions of listed companies.

Asked about the Jalan Committee report, which has recommended sweeping changes in the way stock exchanges and other market infrastructure institutions are owned and run, Bhave said the matter was not discussed at all.

While the Sebi is awaiting some more clarity from the government on the Takeover Code, the regulator is still collating the feedback received on Jalan panel recommendations, he said.

The Takeover Code has been awaiting a clearance for many months now and has been discussed in at least three meetings of the Sebi board, which has representations from the government also, so far without any final decision.

Whenever the government completed its consultations, Sebi will take decision on Takeover Code, Bhave added.

While Bhave did not specify any reasons for delay in decisions on these two major issues, sources close to the development said that the government is of the view that these matters could be best taken up by the next Sebi chief.

Bhave's three-year term as Sebi chief ends on February 17 and he would be succeeded by U K Sinha, chief of fund house UTI AMC and Chairman of mutual fund industry body Amfi.

Sebi had begun the process of finalising its guidelines on the way bourses are owned and do business, based on the feedback received on recommendations made by the Jalan committee on this matter, in January it self.

Sebi had put forth the recommendations made by the Bimal Jalan Committee for review of ownership and governance norms for market infrastructure institutions on November 23, 2010 and had invited public comments on the same till December 31.

The committee suggested sweeping changes in the way stock exchanges are owned and function and its proposals include capping their profitability and not allowing them to get listed to safeguard their front-line regulatory role.

The proposals generated intense debate and opposition has been raised to various proposals including non-listing of bourses and cap on profitability, terming them as measures that would push the investors away.

The takeover norms were discussed in last Sebi board meeting on October 25 last year as well.

In July 2010, a Sebi committee under the Chairmanship of C Achuthan, had proposed changes in the current takeover rules, to give more rights to minority shareholders.
The panel had recommended making it mandatory for acquirers to make an offer for up to 100 per cent stake in any listed company.

At present, an open offer for a minimum 20 per cent is required to be made by any entity that has purchased 15 per cent equity, either from the promoters or the open market.

The committee had also suggested an increase in the open offer trigger point to 25 per cent, from 15 per cent now.

Sources said that there have been mostly positive comments on the guidelines proposed in the draft Takeover Code, especially for the one enhancing the public offer trigger point to 25 per cent.

However, there is no unanimous view on acquirers being asked to make an offer for the entire 100 per cent holding in the public offers so that public shareholders also get an opportunity along with promoters to exit.

The new code has also proposed to bring in parity in pricing for promoters and non-promoter shareholders. It proposes that minority shareholders also get the same price as a substantial shareholder and provide a level playing field to all stakeholders, whether they are promoters or small investors.

At present, the promoters and some large shareholders get better price by way of non-compete fee and other payments from the buyers and these are not available to small investors.