What Major Market Reforms Did SEBI Approve?

Mumbai, June 18 (NationPress) The Securities and Exchange Board of India (SEBI) has unveiled a series of significant reforms aimed at enhancing the efficiency, inclusivity, and investor-friendliness of the Indian financial markets.

These decisions were made during the SEBI board meeting chaired by Tuhin Kanta Pandey.

One of the most notable changes allows startup founders to retain their Employee Stock Ownership Plans (Esops) even after their companies go public.

Previously, founders were categorized as ‘promoters’ post-IPO and lost their Esop eligibility.

This adjustment acknowledges that many startup founders accept lower salaries in exchange for equity, thus encouraging them to drive long-term growth.

To prevent potential misuse, SEBI now mandates a one-year gap between issuing Esops and filing for an IPO.

In another major decision, the market regulator has established a new framework for the voluntary delisting of Public Sector Undertakings (PSUs).

This change makes it easier for PSUs to exit the stock market with shareholder approval.

Previously, this process was overly complicated and rarely executed. The government, which holds majority stakes in numerous PSUs, has been seeking strategic disinvestment options, and this new framework will facilitate that effort.

Furthermore, SEBI has introduced changes benefiting Alternative Investment Funds (AIFs). These funds can now enable their investors to make co-investments through a dedicated setup known as a co-investment vehicle.

This allows larger investors to invest more in the same private companies where the AIF has already committed funds.

The aim is to provide significant investors with more direct opportunities in promising deals.

Additionally, AIF managers are now permitted to offer advisory services to investors across different categories, even if their funds are invested in the same listed stocks.

This grants fund managers greater flexibility and enhances their ability to deliver professional advice.

To attract more long-term foreign capital, SEBI has simplified regulations for foreign investors wishing to invest solely in Indian government bonds.

As these bonds are considered lower risk, the market regulator is easing registration and compliance requirements.

This initiative is anticipated to make India more appealing to global investors seeking stable returns.

The SEBI also reviewed a potential settlement plan for brokers implicated in the National Spot Exchange Limited (NSEL) case.

With over 300 show-cause notices issued and feedback from the Securities Appellate Tribunal (SAT), the market regulator is exploring solutions to resolve the issue through its consent regulations framework.