With an aim to make it easier and attractive for foreign investors to invest in Indian capital markets, SEBI will consider on Tuesday wide-ranging changes in the norms governing them, including KYC requirements and taxation-related issues.
The proposed measures, including those suggested by a SEBI-appointed committee on rationalisation of investment routes and monitoring of foreign portfolio investments, cover a simplified procedure for registration of all kinds of foreign investors and are aimed at attracting greater overseas inflows into Indian markets.
The committee, headed by former Cabinet Secretary K.M. Chandrasekhar, has also suggested various classes of foreign investors, including FIIs, sub-accounts and qualified foreign investors, being merged into a new category to be called ‘Foreign Portfolio Investor’.
Another key proposal involves single overseas investments of more than 10 per cent in a company being classified as Foreign Direct Investment and those less than 10 per cent as foreign portfolio investment.
The recommendations made by the committee, along with SEBI’s additional suggestions, would be forwarded to the Government for implementation.
Apart from Chandrasekhar committee report, SEBI’s board would also discuss measures to streamline the procedures for buy-back offers made by promoters and the issuance of shares on preferential basis.
Listing start-ups, SMEs
Besides, SEBI may also discuss a proposal that would allow start-up companies and SMEs to get listed on the bourses without launching an initial share sale but trading in their shares would be restricted to only ‘informed’ investors.
Among other proposals being considered by SEBI include, new norms for angel investors, who provide funding to companies at their initial stages.
In addition, some changes related to mutual fund industry including setting up of a single Self Regulatory Organisation for all distributors, who would also be allowed to access the stock exchange platform may also be announced.
Besides, the fund houses might be allowed to conduct proprietary trades on the debt segments of stock exchanges, while separate changes are also in works to further strengthen the newly launched independent debt platforms of the bourses.
The board would also be apprised of status on minimum public shareholding norms for both public and private sector firms.