Sebi board meet most kotak panel proposals accepted

In the board meet Wednesday, the markets regulator Securities Exchange Board of India (SEBI) Board decided to facilitate greater alignment of the cash and derivative market. The physical settlement for all stock derivatives shall be carried out in a phased and calibrated manner, said SEBI chairman Ajay Tyagi. The regulator will update and strengthen the existing entry criteria for introduction of stocks into the derivative segment in line with the increase in market capitalization since the last revision of the criteria in 2012. Accordingly, existing criteria such as market wide position limit and median quarter-sigma order size shall be revised upward from current level of Rs 300 crore and Rs 10 lakh respectively to Rs 500 crore and Rs 25 lakh respectively.

About regulating the derivatives F&O (futures and options) market, the chairman said, "Twenty six percent of the F&O traders are retail investors who invest in them without possessing much much about them. The regulator intervenes in the F&O trading even in the developed market. There are some criteria (in developed markets) where it is linked to educational qualifications of the people who trade. To begin with, we will do some soft touch regulation for the benefit of retail investors." Mayuresh Joshi, fund manager, Angel Broking said, "SEBI plans to move all stock futures into physical settlement in a phased manner so that the speculative element can be reduced."

Uday Kotak Panel Recommendations SEBI board decided to accept several of the Uday Kotak Committee recommendations on corporate governance. A major recommendation that has been accepted entails the split in the designation of CMD (CEO/managing director and chairman) by April 1, 2020. The proposal will have be implemented in the top 500 listed companies, by the market value. Several top businessmen such as Mukesh Ambani (Reliance Industries), Azim Premji (Wipro) and Venu Srinivasan (TVS Motors) have this designation. Other suggestions that were accepted include reduction in the maximum number of listed entity directorships from 10 to 8 by April 1 2019 and to 7 by April 1, 2020. The companies are mandated to expand the eligibility criteria for independent directors. The markets regulator also accepted the recommendation that enhances the role of the audit committee, nomination and remuneration committee and risk management committee. Start-up Boost Giving a major boost to the start-up culture in India, markets regulator Securities And Exchange Board of India (SEBI) on Wednesday increased the maximum investment from angel investors in start-ups to Rs 10 crore from Rs 5 crore. The minimum capital required to set up a start-up has been reduced from Rs 10 crore to Rs 5 crore, said SEBI Chairman Ajay Tyagi in a board meeting. The maximum period of investment in funds has also been raised from the current three years to 5 years. More Power to stock markets SEBI has bestowed on stock exchanges more powers to crack down on listed entities. The stock exchanges can freeze shareholdings of of promoters for non-compliance of SEBI regulations. Initial Public Offering (IPO) On initial public offering (IPOs), Mr Tyagi said that the year has been phenomenal as the IPO market raised Rs 2 lakh crore, which is the highest in more than a decade. As far as stray cases (of poor response to IPO such as Hindustan Aeronautics Limited and ICICI Securities) are concerned, it is because of high valuation of scrips by those companies, he said. Algo-Trading gets cheaper