Mumbai: Markets watchdog Sebi on Wednesday approved stricter disclosure norms for listed companies on loan defaults and set revised regulations for portfolio managers and for rights issues.
The changes will be effective from January 1, 2020.
The regulator made it mandatory for listed companies to disclose default in repayment of principle or interest on loans beyond 30 days within 24 hours.
It has also decided to amend the norms for portfolio managers by raising net worth and minimum investment requirements.
Speaking to reporters after its board meeting here, Sebi Chairman Ajay Tyagi said the objective behind the new default disclosure requirements is to “get more openness to help investors”.
There have been several instances of huge loan defaults by corporates and in most cases, the disclosure about loan default had come very late.
Sending out a stern message, Tyagi also said that action will be taken against companies that do not disclose about whistleblower complaints in the garb of finding them as “not material”. “If companies are 'fooling' by disclosing information to boost sentiment, action will be taken,” Tyagi said. It may be noted that Sebi is probing the issue of whistleblower complaints against Infosys.
With a view to keep retail investors away from portfolio management schemes (PMS), Sebi decided to raise the minimum investment amount of clients for such schemes to Rs 50 lakh from the earlier Rs 25 lakh.
Besides, it has decided to increase the networth requirement of portfolio managers to Rs 5 crore from 2 crore. It further said the existing portfolio managers will have to meet the enhanced requirement within 36 months.
“Hiking the investment limit for PMS from Rs 25 lakhs to Rs 50 lakhs is a bit restrictive. Many potential investors are likely to be denied the benefits of PMS,” said V. K. Vijaykumar, Chief Investment Strategist at Geojit Financial Services.
The markets regulator also decided to reduce the overall time taken for rights issue to 31 days from the current 55, a move aimed at making the process more efficient.
Besides, the regulator has made ASBA facility as a mandatory mode of payment for all investors applying to shares on rights basis.
