Govt official suggests Sebi to set up panel on private placement

Will look into compatibility of Sebi regulations with provisions of Companies Bill dealing with private placement

A government official has suggested that the stock market regulator set up a committee to ensure that securities laws on private placement are in line with proposed government regulation on the same.

The Secretary of the Ministry of Corporate Affairs (MCA) asked that the regulator ensure compatibility with the proposed Companies Bill in Sebi’s last board meeting held in March, according to the agenda which was recently made public.

“Secretary, MCA stated that while proposed regulations can be notified, a committee may be constituted separately to look into the compatibility of Sebi regulations with the provisions of Companies Bill dealing with the private placement,” it said.

Naved Masood, Secretary at the Ministry of Corporate Affairs serves as a member of the Securities and Exchange Board of India (Sebi), according to its website.  

The issue was discussed as part of a broader discussion on draft regulations for issuance and listing of Non-Convertible Redeemable Preference Shares. These can be used to raise capital either through a public issue or through private placement.

The regulator passed the regulations for issuance and listing of non-convertible redeemable preference shares the board meeting. It put in place requirements including a minimum tenure of three years and a rating requirement for public issuances. It fixed a minimum application size of Rs 10 lakhs in the case of private placement.