Sebi new rules – Sebi approves new proposals: Key takeaways from Tuhin Kanta Pandey’s first board meet

In its first board meeting under new chairperson Tuhin Kanta Pandey held on Monday, Sebi approved fresh proposals, ranging from raising the threshold limit for foreign portfolio investors (FPIs) of equity AUM in Indian markets to disclosure obligations for board members and senior officials.

Here are the key takeaways from the board meeting:

* The market regulator cleared a proposal to raise the threshold limit for foreign portfolio investors (FPIs) from the present Rs 25,000 crore of equity AUM in Indian markets to Rs 50,000 crore. “FPIs holding more than Rs 50,000 crore of equity AUM in the Indian markets will now be required to make additional disclosures as described. Any FPI holding more than 50 per cent of its equity AUM in a single corporate group is required to make disclosures under the additional disclosure framework. FPIs crossing this new limit must disclose ultimate ownership and control,” Sebi stated.

* The market watchdog also eased norms for alternative investment funds (AIFs) to ease business constraints. “Investments in listed debt securities rated ‘A’ or below will now be treated like unlisted investments, helping AIFs meet compliance requirements,” Sebi said.

* The regulator mentioned that public interest directors (PIDs) can be appointed without shareholder approval, but Sebi’s nod remains mandatory. “Appointment, reappointment, or termination of Key Management Personnel (CO, CRiO, CTO, CISO) will need Governing Board approval (not just NRC approval as earlier),” Sebi underscored.

* It revised the advance fee structure for Investment Advisers (IAs) and Research Analysts (RAs). “If the client agrees, IAs and RAs can now collect advance fees for up to one year (previous limit: 2 quarters for IAs, 1 quarter for RAs). These fee-related rules apply only to individual and HUF clients (non-accredited). Institutional clients and accredited investors will be governed by custom bilateral contracts,” Sebi said.

* Sebi approved the formation of a high-level committee (HLC) to examine and revamp its rules on conflict of interest and disclosure obligations for board members and senior officials. According to the regulator, the committee will conduct a detailed review of regulations governing property, investments, and liabilities of board members.

* The overhaul will apply across the hierarchy — including Sebi’s own chairperson. It aims to fortify Sebi’s framework for ethical conduct, transparency, and accountability.