When Sebi turned bullish on bringing back trust to markets!

From stringent measures against erring entities to successful completion of merger with FMC, 2015 was a bull run year for regulator Sebi in bringing back investor trust to markets - a trend set to continue in the New Year.
With a number of proactive reform measures, as also some strict and faster enforcement actions, Sebi sought to usher in greater trust of all stakeholders including investors and the market entities.
The efforts were well reflected in India being ranked by the World Bank for the second continuous year at the eighth position globally on protecting the interests of minority shareholders, above many developed countries.

In fact, this is the only parameter where India is ranked in the top-ten on the World Bank's Ease of Doing Business rankings, where the country's overall position continues to remain very low at 130th place after a modest improvement.
Enforcement got a big thrust this year, with Sebi taking action against many unauthorised CIS and deemed public issues. The notable action was against PACL where money has been raised to the tune of Rs 50,000 crore.
The market regulator's enforcement machinery worked in clock work precision after the company failed to refund the money within the time period granted by the Securities Appellate Tribunal and it passed recovery orders against PACL and attached its assets.

This reminiscent of the action taken against MPS greenery in June 2013 when Sebi issued enforcement orders after the deadline was over.

Other important enforcement orders passed by Sebi were against entities indulging in market manipulation while trying to avoid Long Term Capital Gains Tax. Sebi's surveillance system helped in tracking this manipulation and about Rs 15,000 crore are estimated as tax avoidance.
Sebi banned 900 entities from dealing in securities markets.
The amendment to Sebi Act provided for special courts to try prosecution cases filed by the regulator. In 2015 itself, a special court started functioning in Mumbai and cases filed by Sebi are being heard on a daily basis. This has already created jitters among the corporates and others who had thought that prosecution cases might take years to be heard.

The merger of 60-year-old commodities markets regulator FMC with Sebi added another feather to the cap of the capital markets regulator. The merger was done as per schedule and Sebi has already put in systems in place to ensure that the commodity derivatives market is regulated at par with the equity markets.
The regular monitoring of Sebi with its surveillance system is being taken with a pinch of salt by commodity futures brokers and exchanges.
Unprecedented trust of retail investors in the market was evident with the manifold increase in creation of new Mutual Fund folios to the extent of four million new folios.

The net equity inflow till November this year is already Rs 68,000 crore, as against the last year's figure of Rs 71,000 crore.
This year also saw the money raised through IPOs on an
increased trend. WIth ASBA being made mandatory from January 1, 2016 and with e-IPOs, the time taken for listing will reduce from 12 days to six days. This will cut costs involved in public issue of equity shares and also broad base the reach of retail investors.
To encourage entrepreneurial efforts, Sebi has put in place a simplified framework for capital raising by technological start ups and other companies on Institutional Trading Platform.

On ease of doing business, Sebi carved out a new regulatory framework for market-based financing of startups. It put in place a Simplified Framework for Capital Raising by technology start-ups and other companies on Institutional Trading Platform.
The Framework incidentally came into effect from August 15, 2015.
While streamlining the process of public issues, Sebi has initiated e-IPO that would obviate the need to issue cheques with effect from tomorrow for investing in IPOs.
This initiative will also reduce the time taken for listing from 12 days to 6 days from the date of closure of public issues and will broad base the reach of retail investors and reduce the costs involved in public issue of equity shares and convertibles.

The revised abridged prospectus also improves the readability and contains relevant information for the investor to take well informed investment decision even while the investor has the option to obtain full prospectus from the market intermediaries associated with the public issue and can also download from the websites of stock exchanges, merchant bankers and Sebi.
Pursuant to this rationalization the 47 page abridged offer document has been reduced to 10 pages, font size increased to 11 from 10 (Times New Roman). The new abridged prospectus has become applicable from December 1, 2015.
In order to enable more number of listed companies to raise further capital using fast-track route, it was decided to reduce the minimum public holding requirement from Rs 3000 crore to Rs 1000 crore in case of FPO and to Rs 250 crore in case of rights issue.

It was also decided that resident individual investors can open a trading account and demat account by filling up a simplified Account Opening Form termed as 'SARAL AOF'. For these set of individual investors, it has been decided to simplify the requirement of submission of 'proof of address'.
Henceforth, individual investor may submit only one documentary proof of address (either residence/correspondence or permanent) while opening a trading account and/or demat account or while undergoing.