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Volume IconSebi board meeting today: Here are the important issues on agenda

Will market regulator Sebi take up measures allowing PE players to set up mutual funds at today's board meeting? Will there be a decision on the M&A norms, and special voting rights for startups?

ImageSaloni Goel New Delhi

Market participants will closely watch Sebi's board meeting scheduled today for the regulator's decision on a few important things. While private equity firms could be allowed to acquire or set up their own asset management companies, a decision on superior voting rights may give founders of new-age companies more flexibility to raise capital before going public.

Also of interest will be whether Sebi will rethink a move to the T+1 settlement cycle from T+2 earlier, especially after a vehement opposition to the proposal by foreign portfolio investors. Though the proposal is yet to be implemented, the FPIs have warned of a reversal of gains by unforeseen consequences of moving to the new system. They have opposed the move citing several operational challenges like time zone difference, cumbersome information flow process and lack of supportive infrastructure. Sebi plans to unveil T+1 cycle from January 2022, and it remains to be seen if amid the pushback from FPIs, whether Sebi rethinks its decision.

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U R Bhat, co-founder and director of Alphaniti Fintech, said: "The regulator can reiterate its stance on the T+1 settlement without getting into too much detail. The infrastructure needs to fall into place before the T+1 settlement cycle is implemented."

Further, Sebi may consider a proposal to ease mutual fund ownership rules in India.

Private equity players may soon get more leeway to snap up or set up their own asset management companies. At present, PE firms are not banned from acting as MF sponsors, but the prerequisites act as a deterrent for them to take up the sponsorship of MFs. The capital market regulator may look to change this.

The MF regulations say that if a sponsor changes, the investors have to be provided with an exit option. A PE fund may like to exit after a few years, but providing an exit to investors each time is not amenable to business generally. Sebi today might consider easing this rule, provided PE firms don't exit the business before 5-7 years.

At today's meeting, Sebi can also discuss making M&A norms easier.

The regulator at its board meeting could discuss a proposal on making it easier for companies to delist after an open offer by allowing the acquirer to launch both processes simultaneously.

Apart from Sebi's board meeting, investors will also eye global cues, stock-specific news flow, oil price movement, and FII trends today.

On Monday, the benchmark indices gyrated between gains and losses before settling flat with a positive bias. The S&P BSE Sensex ended 29 points higher at a fresh closing peak of 60,078 while the broader Nifty50 index ended the day at 17,855, up 2 points over previous close. During the day, the BSE Sensex managed to log a fresh record high of 60,412.

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First Published: Sep 28 2021 | 9:34 AM IST

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