SEBI board meet set to change norms for search and seizure

The SEBI board meet, scheduled for January 22 in Mumbai, will come out with new regulations on search and seizure replacing existing ones amended just last year. According to sources, the new norms will be aligned with Income Tax practices so that SEBI can regulate the market in a better manner while enforcing securities laws.

The board meet will also ratify a new set of norms for partly paid-up shares to foreign institutional investors that will be in tune with RBI regulations.

Another important agenda the SEBI board will take up is delisting norms, said sources.

Currently, the Securities Exchange and Board of India has the power to order search and seizure operations during investigations, while necessary safeguards have also been put in place to protect the rights of affected persons.

In a discussion paper on partly paid-up shares, SEBI had proposed that companies should receive a minimum upfront payment of 25 per cent of the total subscription from foreign investors in a rights issue.

The time period within which these partly paid-up shares have to be made fully paid-up has been retained at 12 months for both public as well as rights issues.

Similarly for warrants, the market regulator had proposed a minimum upfront payment of 25 per cent for public, rights and preferential issues. The period of conversion has been increased to 18 months from 12 months for public and rights issues of warrants, while it has retained an 18-months timeframe for preferential warrant issues.

The SEBI board meet will also consider some tweaks in the current delisting proposal with regard to minimum public participation. Even the SEBI Chairman has been indicating reconsideration of that proposal.

There were oppositions to the new delisting norms, particularly from India Inc, as promoters planning to take their company private have to secure the consent of 25 per cent public shareholders.

Market participants were also uneasy with the new norm that mandates participation of at least 25 per cent public shareholders in the process.