Ushering in a raft of reformist measures, Sebi today permitted mutual funds to invest their money in REITs and InvITs, slashed broker fee by 25 per cent and strengthened settlement as well as merger regulations as it strives to attract more investors into the market.
Apart from allowing celebrity endorsement of products in the fast-growing mutual funds market, Sebi will amend financial criteria for municipalities to issue bonds.
Other than approval of the measures aimed at reducing the overall transaction cost as also protect the interest of public shareholders, Sebi's board, which met here, gave its nod to market intermediaries and companies to make regulatory payments digitally.
"Keeping this objective in mind and taking into consideration the projected income and expenditure of Sebi for the next three financial years, the board decided to reduce the fees payable by brokers by 25 per cent from Rs 20 per crore of turnover to Rs 15 per crore," Sebi said in a release.
Mutual funds have been allowed to invest in real estate investment trusts (REITs) and infrastructure investment trusts (InvITs) that have been classified as hybrid instruments.
A mutual fund can invest up to 5 per cent of its net asset value in units of a single issuer of REITs and InvITs while the cap will not be applicable in the case of index fund or sector or industry-specific scheme.
The overall limit will be 10 per cent of its NAV in units of REITs and InvITs.
As it looks at ways to attract more investors into the capital market, the Sebi board has cleared a new advertising code for the mutual funds industry which can also use celebrities to endorse their products.
Under the new advertisement code, performance related information should be disclosed in a simple and effective manner while providing precise and latest information to investors.
Tightening the settlement norms, the regulator has decided to provide incentives to defaulters coming on their own to settle cases before start of enforcement action even as excessive delays in filing of settlement applications will attract higher charges.
As part of measures to protect the interest of public shareholders, the merger norms will be tweaked under which very large unlisted companies will be restrained from getting listed by merging with a very small company.
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In efforts to empower stock exchanges, they will be allowed to penalise listed companies in case they violate ICDR (Issue of Capital and Disclosure Requirements) Regulations.
Once the amendments take effect, stock exchanges will have power to enable actions such as imposition of fines and suspension of trading.
Sebi will allow municipalities having a surplus in their books in any of the three immediately preceding financial years to issue bonds.
The watchdog will also specify the financial criteria from time to time.
Meanwhile, the regulator will levy a filing fee on draft scheme of arrangements on the lines of the amount charged for placing offer documents. A fee will be levied for application under buyback regulations, apart from a processing fee on an application for relaxation of strict enforcement of Sebi's ICDR regulations.
In addition, the fee charged under Substantial Acquisition of Shares and Takeovers (SAST) Regulations will be increased to Rs 5 lakh from Rs 3 lakh.
Meanwhile, Sebi's International Advisory Board (IAB) has suggested that the regulator study migration to fee-based model for robo-based investment advisory, apart from being tough but open to innovations in new areas like crowd-funding.
After its two-day meeting that ended today, the panel asked the capital market regulator to ensure performance evaluation for boards of listed companies has to go "beyond a box-ticking exercise" and enable disclosure of the evaluation result with shareholders.