SEBI approves new Social Stock Exchange, eases terms of M&A deals

Securities market regulator SEBI has approved a slew of investor and business-friendly measures, including the creation of Gold and Social Stock Exchanges, among others. These decisions were taken by the SEBI board which met in Mumbai on Tuesday.

In a statement, the regulatory body listed the various decisions that were taken during the meeting such as approval for the framework for Gold Exchange and SEBI (Vault Managers) Regulations, 2021.

"The Gold Exchange, encompassing the entire ecosystem of trading of 'EGR' and physical delivery of gold, is expected to create a vibrant gold ecosystem in India, commensurate with the country's large share of global gold consumption," the regulator said.

"The Gold Exchange would be a national platform for buying and selling 'EGRs' with underlying standardised gold in India and also create a national pricing structure for gold," it added.

The board also approved an amendment to enable the introduction of 'Silver Exchange Traded Funds' with certain safeguards in line with the existing regulatory mechanism for Gold ETFs.

Besides, the SEBI board approved the creation of the Social Stock Exchange (SSE) for fundraising by social enterprises.  The framework for the SSE has been developed on the basis of the recommendations of a working group and a technical group constituted by the SEBI," it said.

In a major decision, the board also approved the proposal to amend the existing regulatory framework for delisting of equity shares pursuant to an open offer. "The revised framework aims to make M&A transactions for listed companies a more rational and convenient exercise, balancing the interest of all investors in the process," it said.

Resident Indians in FPIs

SEBI also approved the amendment required for permitting Resident Indians (other than individuals) to become constituents of FPIs that are registered as AIFs in IFSCs. "Such Resident Indians shall be sponsor or manager of the FPI and their contribution in the FPI shall be subject to conditions as specified by the board," it said.

Additionally, other amends to facilitate co-investment by investors of Alternative Investment Funds (AIF)through the portfolio management route.

"The 'Portfolio Manager' providing co-investment services to investors of AIFs shall invest 100 per cent of the assets under their management in unlisted securities and shall be exempted from certain requirements including minimum investment amount, minimum net worth," it said.

Notably, an 'Investor Charter of SEBI for investors' in the securities market was also approved.

"The investor charter, inter-alia, includes the vision statement of SEBI for the investors. SEBI has also developed 'Investor Charters of SEBI recognised Market Infrastructure Institutions (MIIs), registered intermediaries and regulated entities in consultation with various entities," it said.

Rules on board members

In addition, the regulator's board considered and approved the agenda on criteria for determining 'fit and proper person to become a board member of listed companies. "The rule-based criteria will determine the fit and proper status of the person based on the disqualifications as has been prescribed," it said.

"Some of such disqualifications include an order of conviction passed against such person by a court for any offence involving moral turpitude or such person has been declared insolvent and not discharged or has been categorised as a wilful defaulter or has been declared a fugitive economic offender or against whom an order has been passed by SEBI or any other financial sector regulator," it said.