The Securities and Exchange Board of India (“SEBI” or “the Board”) in its meeting dated August 6, 2021 decided on various important subjects like that of merger of Share Based Employee Benefits and Sweat Equity Regulations and relaxation of lock in requirements for promoters along with many others. Major highlights are mentioned below:
- Merger of Share Based Employee Benefits and Sweat Equity Regulations– The Board has now merged SEBI (Issue of Sweat Equity) Regulations, 2002 and SEBI (Share Based Employee Benefits) Regulations, 2014 into a single regulation called the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021.
- Relaxation of lock in requirements for promoters – Talking about Initial Public Offering (“IPO”), the Board has decided to reduce the lock-in requirement of promoters’ shareholding from 3 years to 18 months from the date of allotment of IPO in certain cases and has also reduced the disclosure requirements at the time of the of IPO.
- Shifting from concept to ‘promoter’ to ‘person in control’ or ‘controlling shareholders’ concept- The Board agreed to the proposal of substituting the term “promoters” with “person in control” or “controlling shareholders” and has decided to prepare draft amendments to analyse the impact of the same.
- Review of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015- The Board has approved to review the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 pertaining to issuers who have listed Non-Convertible Debt Securities, Non- Convertible Redeemable Preference Shares, Perpetual Debt Instruments and/ or Perpetual Non-Cumulative Preference
- Reduction in disclosure requirements- Approved certain amendments in SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 w.e.f. April 01, 2022 to do away with certain disclosure obligations for the acquirers/promoters. Further, approved certain measures to reduce disclosure requirements at the time of IPO. Furthermore, approved amendments in SEBI (Alternative Investment Funds) Regulations, 2012 to rationalise compliance requirements for Alternative Investment Funds (“AIFs”) with an objective to provide investment flexibility and streamline regulatory processes.
The Complete Press Release can be accessed at: https://www.sebi.gov.in/media/press-releases/aug-2021/sebi-board-meeting_51707.html