The Board of the Securities and Exchange Board of India (Sebi) on Friday approved a proposal to exempt additional disclosure requirements for FPIs (foreign portfolio investors) having over 50% of their India equity AUM in a single corporate group if certain conditions are met.

The relaxations in certain disclosure norms are aimed at ease of doing business.

Further, the market regulator has also approved a Beta version of optional T+0 settlement, for a limited set of 25 scrips, and with a limited set of brokers. The optional settlement will be rolled out from March 28.

Last month, the capital market regulator floated a consultation paper, seeking comments on its proposal to ease additional disclosure requirements for foreign portfolio investors.

The market regulator said that as long as the composite holdings of all such FPIs in the apex company in the group are less than 3% of the total equity share capital of the company, it would be exempted from the additional disclosure requirements.

“It’s a welcome step by Sebi to consider relaxing the timelines for disclosure of material changes by FPIs. The current seven-day deadline poses practical challenges, particularly with multiple teams involved across different jurisdictions. Extending the reporting timeframe to 30 days offers a more reasonable window, greatly benefiting FPIs,” said Vivek Singhania, Co-founder, Dovetail Group.In August last year, Sebi mandated FPIs to disclose detailed information about entities holding any ownership, economic interest, or control in them, without any threshold. However, many FPIs made representations to the regulator, seeking certain relaxations in disclosure requirements.In a board meeting on Friday, Sebi has also approved to relax the timelines for disclosure of material changes by FPIs. Currently, FPIs must disclose to their DDP, material changes to the information provided earlier, within seven working days.

Further, the regulator has given a nod to providing flexibility to FPIs in dealing with the securities post-expiry of their registration.

FPI registrations that expire due to non-payment of registration fees will now be permitted to be reactivated within 30 days from such expiry.

Here are other proposals accepted by Sebi board

Beta version of optional T+0 settlement

Post the launch of the Beta version of the optional T+0 settlement, Sebi will continue to do further stakeholder consultation, including with the users of the version.

The board will review the progress at the end of three months and six months from the date of its implementation, and decide on further course of action.

Easing norms for IPOs

In order to make it easy for companies to access public markets, the regulator has accepted a proposal that seeks to do away with the requirement of a 1% security deposit in public/rights issue of equity shares.

Further, promoter group entities and non-individual shareholders holding over 5% of the post-offer equity share capital will be permitted to contribute towards minimum promoters’ contribution (MPC) without being identified as a promoters.

The equity shares from the conversion of compulsorily convertible securities held for a year before filing the DRHP will also be considered for meeting MPC requirements.

Sebi noted that the increase or decrease in the size of an offer for sale (OFS) requiring fresh filing will be based on only one of the criteria i.e., either issue size in rupees or the number of shares, as disclosed in the draft offer document.

Easing certain norms for listed companies

The regulator has also eased some compliance requirements for listed companies, including introducing a sunset clause of three years for cessation of applicability of market cap-based provisions.

The board approved extending the timeline for listed companies from three months to six months for filling up vacancies of key managerial personnel, which require approval of statutory authorities.

Meanwhile, the timelines for prior intimation of board meetings have been reduced to two working days.

Verification of market rumours by listed entities

To facilitate a uniform approach to the verification of market rumours, Sebi specified uniformly assessed criteria for rumour verification in terms of material price movement of the listed entities.

Under this, promoters, directors, key managerial personnel and senior management need to provide timely responses to the listed entity for verifying a rumour.

Any unverified event or information reported in print or electronic media must not be considered as ‘generally available information’ under Sebi rules, the regulator said.

Some other proposals that received the Sebi board’s go-ahead include:

• A framework to provide flexibility to Category I and II AIFs to create an encumbrance on their holding of equity in infrastructure sector investee companies.

• Extending the timeline for mandatory applicability of listing norms for high-value debt listed entities (HVDLEs).

• Giving additional flexibility to AIFs and their investors to deal with unliquidated investments of their schemes beyond the expiry of tenure.