REVIEW OF SEBI

Sebi tightens disclosure and review norms for rating agencies

Sebi also said the CRAs should disclose parameters such as liquid investments or cash balances, access to any unutilised credit lines and adequacy of cash flows in a specific section on liquidity.

The Securities and Exchange Board of India (SEBI) has simplified the compliance requirements for foreign portfolio investors (FPIs), to make the regulatory framework more investor friendly.

For reviewing rating criteria, Sebi has directed rating agencies, to assess inter-linkages of holding company and subsidiaries, holding company’s liquidity, financial flexibility and support to the subsidiaries.

Key aspects of revised regulations include: 

• To simplify the registration process and to bring about ease in compliance requirements  for FPIs, the broad based eligibility criteria for institutional foreign investors has been done away with.
• On reviewing the risk profiling of the FPIs, it is decided that the FPIs may be re-categorized into two categories, instead of the present requirement of three categories.
• Registration for multiple investment manager  (MIM)  structures  has  been simplified.
• Considering that the central banks are relatively long term, low risk investors directly/ indirectly managed by the Government, the central banks that are not the members of BIS (Bank for International Settlement) shall also be eligible for FPI registration.
• The entities established in the international financial services center (IFSC) be deemed to have met the jurisdiction criteria for FPIs.
• FPIs shall be permitted for off-market transfer of securities which are unlisted, suspended or illiquid, to a domestic or foreign investor.
• Offshore funds floated by Indian Mutual Funds shall now be permitted to invest in India after obtaining registration as FPI.
• The requirements for  issuance  and  subscription of Offshore  Derivative Instruments (ODIs) have been rationalized.

Source: The Hindu