Sebi lowers broker fee by 25%; releases norms on mergers

In a meeting held on Saturday, Sebi announced various measures where it reduced the fees payable by brokers upto 25% and also streamlined new framework in regards to mergers and demergers. 

For brokers, the regulator has reduced fees payable by 25% which would be from Rs 20 per crore to Rs 15 per crore of turnover in a move to benefit investors and promote the development of securities market. 

The regulator said, "SEBI has been following the practice of calibrating the fees either upwards or downwards as per SEBI’s requirements from time to time so as to keep a balance between the financial resources required to ensure regulatory efficiency while maintaining reasonableness to avoid any undue burden on any particular class of intermediaries."

While under mergers and demergers, Sebi brought in the following arrangements. 

In case of merger of an unlisted company with a listed one -  the unlisted company, shall comply with the requirement of disclosure of material information as specified in the format for abridged prospectus. Also, post scheme shareholding pattern of the “merged” company shall not be less than 25%.

The objective is to have wider public shareholding and to prevent very large unlisted company to get listed by merging with a very small company.

Further with a view to simplify the process, schemes which provide for merger of a Wholly owned Subsidiary (WoS) with the parent company shall not be required to be filed with SEBI. Such schemes shall be filed with stock exchanges for the limited purpose of disclosures only.

Many instructions were also laid down the market watchdog for the merger of unlisted company with listed company inorder to ensure transparency during the transaction process. 

The board also decided to align the fees payable under SEBI (Buy-back of Securities) Regulations, 1998 with the fee payable under SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011. Fee charged the act has been revised to Rs.5.00 lakhs from Rs.3.00 lakhs.