Chennai, Jan 19: The Security and Exchange Board of India, at a board meeting here Friday, took a slew of decisions: the Offer for Sale (OFS) norms for institutions will be made transparent; there will be amendment to takeover regulations, with regard to the date for making public announcement and the offer price, a top official said.
Bringing parity among various regulations relating to disclosure requirement, and widening the definition of strategic investors were also decisions taken by the SEBI board meeting.
The SEBI board decided to allow Infrastructure Debt Fund (IDF)-Mutual Fund to invest funds received on account of pre-payment of principal or regular repayments with respect to the underlying assets of the IDF in bonds of public financial institutions and infrastructure finance companies, U.K. Sinha, SEBI chairman, told reporters.
He also warned that companies not following the minimum public shareholding norms (25 percent) will face action.
Sinha said the board also decided to create a separate debt segment on stock exchanges with an objective to develop the trade in the corporate bond market.
According to Sinha, OFS has been found useful by market participants and the popular mode for promoters in listed companies to achieve minimum public shareholding.
With the deadline for achieving minimum public shareholding fixed as June 2013, he said large number of promoters are expected to off-load their holdings though OFS and hence some changes have been made.
As per the norms approved by the SEBI board, institutions may place orders/bids with 100 percent upfront margin and modifications/cancellations of such orders/bids will also be permitted.
Sinha said institutions may place orders without upfront margin in line with secondary market practice but such bids/orders cannot be modified/cancelled except for upward revision in the price or quantity.
In order to improve transparency, Sinha said SEBI board has decided to make available to the market through the trading session the cumulative bid quantity of 100 percent margined orders as well as non-margined but non-cancellable orders.
The order book shall display both - cumulative orders/bids with 100 percent margin - and without margin. The indicative price shall be disclosed to the market throughout the trading session.
The SEBI board also decided that the 'relevant date' for making the public announcement and determination of offer price in the case of open offers shall be the earliest date on which obligations are triggered.
In the case of preferential allotment, the date of resolution passed by a company board allowing preferential allotment shall be the relevant date for the purpose of triggering of offer obligations.
Sinha said the market purchases made by an acquirer during the open offer period can be completed during the open offer period, subject to such shares being kept in an escrow account.
He said these shares can be transferred from the escrow account to the name of the acquirer after the expiry of 21 working days from the date of the detailed public statement.
The SEBI board also decided to allow an IDF scheme to invest up to 30 percent of its assets under management (AUM) not below investment grade owned by sponsor/associates. However it is subject to the condition that the sponsor/associate retains at least 30 percent of the assets sold to the IDF till the assets are held in the IDF portfolio.