New standards: Sebi relaxes criteria for higher voting rights, changes deregistration rules

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The Vault Manager will be registered and regulated as a Sebi Intermediary to provide Vault Services for gold deposited to create EGRs.

The Securities and Exchange Board of India (Sebi) on Tuesday made a series of decisions relaxing the criteria for senior voting rights (SRs), amending the rules on related party transactions as well as the delisting framework. Sebi has decided to relax the eligibility criteria linked to the framework of SR actions. A shareholder of SR, as an individual, should not have a net worth of more than Rs 1,000 crore.

Existing arrangements required that a shareholder of SR not be part of a group of promoters with a net worth of over Rs 500 crore. In addition, the minimum difference between the issue of SR shares and the RHP deposit has been reduced to 3 months compared to the existing 6 months.

The Board of Directors also approved the changes to the SEBI Regulation (Listing Obligations and Disclosure Requirements), 2015, with regard to the regulatory provisions on Related Party Transactions (RPT). A related party includes all persons or entities that are part of the promoter or group of promoters, regardless of their involvement. Any person / entity holding shares of the listed entity directly or on the basis of beneficial interest at any time during the previous financial year, up to 20% or more, would also be a related party.

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The regulator has approved an amendment to the regulatory framework for the delisting of participating shares by virtue of a public offer as provided for by the current Regulation 5A of the SEBI (Substantial Acquisition of Shares and Takeovers) regulation of 2011 (Takeover Regulation) ).

The revised framework aims to make M&A transactions for listed companies a more streamlined and convenient exercise, balancing the interests of all investors in the process, the capital markets watchdog said. One of the key rules of the new framework is that an acquirer who wishes to delist a company must offer a higher delisting price with an appropriate premium over the open offer price.

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Sebi’s board of directors also approved a proposal to create a gold exchange in which the yellow metal will be traded in the form of electronic gold receipts and the exchange will help set up a transparent mechanism for discovering gold. national spot prices.

Instruments representing gold will be called Electronic Gold Receipts (EGR) and will be notified as securities, Sebi Chairman Ajay Tyagi said at a press conference. EGRs will have the same trading, clearing and settlement functionality as any other, ”Tyagi said. Any recognized exchange, existing or new, can initiate EGR trading in a separate segment.

According to the regulator, the exchange would be a national platform for buying and selling EGR with underlying standardized gold in India and would also create a national price structure for gold. Explaining the criteria for vault managers, Sebi said that the vault manager should be an organization incorporated in India and should have a net worth of at least Rs 50 crore.

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The Vault Manager will be registered and regulated as a Sebi Intermediary to provide Vault Services for gold deposited to create EGRs.

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