Market regulator Securities Exchange Board of India (SEBI) on Friday
approved a series of changes to various regulations which include tightening
the disclosure requirements for initial public offerings (IPOs).

SEBI at its board meeting decided to relax pricing rules for open offers
for disinvestment of public sector undertakings.

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For IPOs, the market regulator approved the proposal mandating the
issuers to disclose Key Performance Indicators (KPIs) and price per share of
issuer based on past transactions and past funds to disclose the offer price
based on past transactions and fundraising activities.

“Issuers shall disclose details of pricing of shares based on past
transactions and past fundraising from an investor,” said the press
release.

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“The thinking behind this is to give investors a better basis to
make their decisions whether the price is appropriate or not. There should not
be asymmetry in information. So, whatever is shared with the QIBs must be
shared with retail investors,” SEBI chairperson Madhabi Puri Buch said.

It also added that the issuer companies, in addition to the audited
financial numbers, also disclose their key numbers on various key performance
indicators in a different section of DRHP which are not covered in the
financial statements in the offer documents.

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SEBI said it would facilitate faster payout of redemption and dividend
to unit holders by AMCs from existing 10 and 15 working days to 3 days and 7
working days. “The old regulations were drafted when cheques were issued.
Today, the payments systems are so advanced and fantastic, so there is no need for
a delay and such a long time limit for investors to get their money,” the
SEBI chairperson said.

Also, companies considering IPOs will soon have an option to make
confidential pre-filing of offer documents.

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SEBI’s board also gave its approval to bring buying and selling of
mutual fund units under the ambit of insider trading rules.

SEBI has also approved the proposed changes in the existing framework
for Offer for Sale (OFS) through the stock exchange mechanism. “It has
been decided to do away with the requirement of minimum 10 percent shareholding
for the non-promoter shareholders for offering shares through OFS
mechanism,” the statement said.

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Currently, non-promoter shareholders holding at least 10% of the share
capital of an eligible company and willing to offer shares of at least Rs 25
crore are eligible to offer their shares through the OFS mechanism.

Among other reforms, the regulatory body said that online bond platforms
must mandatorily register as stockbrokers, and has given its nod to the
proposal to reduce the face value of listed privately placed debt securities.

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SEBI has also amended norms related to Real Estate Investment Trusts
(REIT) to allow a reduction in minimum holding by the sponsors from 25% to 15%
of the total outstanding units. “Minimum holding of sponsors is reduced
now. This is a liberalization,” the chairperson said.