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21
June 2017
 |
SEBI (The Total Investment & Insurance
Solutions)
Market
regulator Securities and Exchange Board of India (SEBI) has relaxed the
takeover norms for the acquisition of stressed assets to help the government
and the Reserve Bank of India (RBI) in their efforts to tackle bad loans. The Total Investment & Insurance
Solutions
SEBI
Chairman Ajay Tyagi told reporters after the board meeting that the regulator
has decided to ease the norms for the acquisition of distressed assets of
listed companies.
At present,
relaxations from preferential issue requirements under SEBI (Issue of Capital
and Disclosure Requirements) Regulations, 2009, and from open offer obligations
under SEBI (Substantial Acquisition of Shares and Takeovers) Regulations are
available for lenders undertaking restructuring of listed companies in distress
through the strategic debt restructuring (SDR) scheme of the RBI.
SEBI says it
was told that lenders who have acquired shares and propose to divest the same
to a new investor are facing difficulties as the new investor would need to
make a mandatory open offer that would reduce the funds available for
investment in the company and hence there was a request for exemptions to these
investors. The Total Investment &
Insurance Solutions
"Accordingly,"
the market regulator said, "It has been decided to extend the relaxations
to the new investors acquiring shares in distressed companies pursuant to such
restructuring schemes. However, such relaxations shall be subject to certain
conditions like approval by the shareholders of the companies by special
resolution and lock-in of their shareholding for a minimum period of three
years. Further, it has also been decided to extend the said relaxations to the
lenders under other restructuring schemes undertaken in accordance with
guidelines of RBI."
Regulatory fee on P-Notes
The SEBI
board has also approved a proposal to tighten the rules for participatory notes
(P-Notes) through the imposition of a regulatory fee on issuers of such
instruments.
SEBI has
levied a regulator fee of $1,000 on each offshore derivative instrument (ODI)
subscriber, to be collected and deposited by the ODI-issuing foreign portfolio
investors (FPI), once every three years beginning 1 April 2017. "The Board
has decided to prohibit ODIs from being issued against derivatives, except on
those which are used for hedging purposes. SEBI will soon issue a circular in
this regard," the market regulator said. The Total Investment & Insurance Solutions
Mr Tyagi,
however, said there is no proposal to completely ban these instruments, as they
can be useful for new foreign investors looking to test the Indian markets.
“SEBI would want foreign investors to come directly but P-notes also have their
usefulness,” he told reporters.
Besides,
SEBI would issue a discussion paper for easier registration of foreign
investors. Another discussion paper would be floated for ways to help develop
equity derivatives markets.The Total
Investment & Insurance Solutions
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