SEBI takes crucial decisions on defaulters, REITs and markets

Market regulator Securities and Exchange Board of India (SEBI) on Thursday took crucial decisions on key factors like markets, defaulters, REITs and credit rating agencies.
 
Addressing media persons, SEBI chief Ajay Tyagi approved the Universal Exchange Convergence effective from October 2018.
 
It means all exchanges like the National Stock Exchange and the BSE will offer stocks and commodities trading on their platform from October 2018.
 
Vikram Limaye, Managing Director and CEO of NSE, in a CNBC report said, "NSE will certainly venture into commodities if SEBI approves the convergence of share & commodity convergence"
 
As per Limaye, this convergence will support an individual to have one account to trade in all asset classes.
 
Further, Tyagi also guided markets to reiterate minimum 25% public shareholding in listed companies. He asked them to allow Qualified Institutional Placement (QIP) as a route to achieve minimum public shareholding.
 
Talking on mutual funds, Tyagi stated that any substantial holding in one mutual fund cannot have substantial holding in another fund. He said, "Any cross holding needs to be corrected within one year time."
 
Moreover, the broad-based foreign funds will be recognised as Category 2 Funds.
 
SEBI also simplified REITS norms so as to enable more companies to list via this mechanism.
 
The market regulator stated that all shareholders agreement will be in line with REITs regulations. REITs may further hold 50% in holding companies and 26% in SPV.
 
SEBI also brought in flexibility for functioning of credit rating agencies. The regulator raised the needed net worth requirement of a credit agency from Rs 5 crore to Rs 25 crore.
 
Also, no substantial cross holding allowed between credit rating agencies. Furthermore, a credit rating agency cannot have board seat in another credit rating agency.
 
The most-awaited topic of bad loans was also discussed during this meet. Tyagi said, "The issue of default disclosure on exchanges has been deferred."
 
He said, "Security receipts issued by an ARC will be allowed to be listed, security receipts can now be listed & traded."
 
The recommendations made Tyagi will be discussed in the next board meeting of Kotak committee.
 
"A decision on trade timing extension will be taken at appropriate time," said Tyagi.
 
On Whatsapp leak case, the regulator said, "More companies are under the scanner for the leakage of unpublished financial data."
 
The market watchdog on Wednesday, in its first order over WhatsApp leak case, ordered Axis Bank to strengthen its systems and conduct an internal probe to fix the responsibility as initial investigation showed that the leakage was due to "inadequacy" of processes at the bank.