Markets regulator SEBI will discuss a slew of measures at its board meeting tomorrow for strengthening the algo trading framework, amending norms for companies undergoing bankruptcy proceedings and increasing regulatory oversight on auditors.

A number of other important matters will also be discussed such as amendments to rules on angel funds, mutual funds, buyback of shares, takeovers, registrars and bankers to issues as well as suspension and revocation of trading, senior officials said. With regard to algo trade, SEBI has proposed a review of trading requirement for algo software for strengthening the algorithmic trading framework by mandating stock exchanges to provide a simulated market environment for testing of software used for such high-frequency trades.

Algo trade has been under the public glare because of an ongoing probe concerning leading stock exchange NSE. An official said various measures are being proposed to address the concerns relating to market quality, market integrity and fairness on account of usage of algo trading and co-location. Further, the regulator may mandate the exchanges to offer shared co-location facilities and provide some services for free.

SEBI plans to bring in additional disclosure requirements for listed corporates undergoing the insolvency resolution process as well as amend norms pertaining to minimum public shareholding norms and other provisions for such entities, the official said. Amendments are being proposed for certain SEBI norms on the basis of three stages of the Corporate Insolvency Resolution Process - pre, ongoing and post CIRP stages.

The proposal comes at a time when there is an increasing number of cases coming up under the Insolvency and Bankruptcy Code (IBC) as entities look to address issues of stressed assets in a time-bound manner. Further, the regulator is considering a new set of norms for auditors and other third-party fiduciaries in the securities market under which defaulters will face stringent penal actions, including ban on issuance of audit or valuation reports and disgorgement of unlawful gains and their fees.

Besides, the regulator may put in place a stronger mechanism to check non-compliance of listing conditions, wherein exchanges will have powers to freeze promoter shareholding and even delist the shares of such defaulting firms. In addition, SEBI is looking to provide an impetus to the early-stage start-up ecosystem by increasing the maximum investment by angel funds in venture capital undertakings to Rs 10 crore from the current Rs 5 crore.

Also, the markets watchdog may come out with a consultation paper on share buy-back programmes, under which the maximum limit for share repurchase would be 25 per cent of a firm’s paid-up capital and other reserves.

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