Firms should have equity-linked pension schemes: SEBI

Private companies should start their own pension funds for non-EPFO (employees' provident fund organisation) employees and invest the funds in the stock market, the market regulator suggested Wednesday.

"Corporates should run their own pension funds for their non-EPFO (employees' provident fund organisation) category employees and invest funds in the equity market," said U.K. Sinha, chairman, Securities and Exchange Board OF India (SEBI).

This would provide long-term capital to the country's equity market, which lack depth, said Sinha while addressing the fifth capital markets summit organised by Confederation of Indian Industry (CII) here.

Sinha announced that SEBI would adopt within three months measures to ensure that filing of information just once with the regulator would be adequate compliance for annual information memorandum.

And the KYC (Know Your Customer) norms across the financial sector will be integrated with the co-operation of all other financial sector regulators.

Sinha also announced that revised ESOP (employee stock ownership plan) guidelines will soon be issued by SEBI.

He mentioned that minimum public shareholding norms would be made neutral vis-à-vis ownership.

The SEBI Chief added that the regulatory hurdles to initial public offerings (IPOs) arose due to the reluctance on part of companies to comply with prescribed governance norms. This, he stressed, was responsible for the lacklustre response to the IPO market.

He advised companies to adopt best practices to attract domestic and international investors.

Nimesh Kampani, who is also chairman JM Financial Group, suggested incentivising investments by providing exclusive tax benefits on mutual fund investments, instead of clubbing them under section 80C of the Income Tax act.