In a reaction to a series of credit-related events that put investor money\nat risk, markets regulator Securities and Exchange Board of India (SEBI) tightened\nnorms on investments by mutual funds (MFs).<\/p>\n\n\n\n
Vowing to take action against MFs getting into standstill agreements with\nthe promoters of companies, SEBI Chairman, Ajay Tyagi said, \u201cWe don\u2019t recognise\nany such standstill agreements. MFs are not banks and there is nothing called\n\u2018standstill\u2019. They (MFs) are investing rather than lending and some of these\nrestrictions have been put to bring in more discipline.\u201d<\/p>\n\n\n\n
Last month, the markets watchdog had questioned the legality of an agreement\nbetween some fund houses and the Essel Group, giving the business house time\ntill September to repay its dues.<\/p>\n\n\n\n
Early this year, the Anil Ambani-led Reliance Group had reached an\nunderstanding with more than 90% of its lenders to avoid sale of any stock\npledged by the promoters until September 30.<\/p>\n\n\n\n
\n\n\n\nThis was despite the collateral cover shrinking and margins contracting\nfollowing an unprecedented fall in share prices of the group firms.<\/p>\n\n\n\n
SEBI is also looking into the recent stake sale by Emami promoters in the\ncompany to raise \u20b91,600 crore from a group of investors, including SBI Mutual\nFund.<\/p>\n\n\n\n
Announcing a slew of reforms after its board meeting, Mr. Tyagi said that there was a need to improve enforcement on all fronts.<\/p>\n\n\n\n
SEBI\u2019s board had decided on key reforms over liquid funds, credit rating\nfirms, promoters\u2019 pledge of shares, and royalty payments.<\/p>\n\n\n\n
SEBI said MFs will now be mandated to invest in only listed non-convertible\ndebentures. All fresh investments by MFs in commercial papers (CPs) and\nequities will also be allowed only in listed securities and liquid mutual fund\nschemes will have to hold at least 20% in liquid assets.<\/p>\n\n\n\n
Amit Singh, CEO, Investica, an online platform for investing in mutual funds\nsaid, \u201cToday\u2019s SEBI meeting has created a tighter framework for debt mutual\nfunds which will ensure that investors are not exposed to undue risk. By making\nit mandatory to invest in listed NCDs and CPs, SEBI has taken a step towards\nensuring the liquidity of the instruments.<\/p>\n\n\n\n
Valuation of securities in debt funds will now be on mark-to-market value\nand hence, there will uniformity across the industry with fair valuation of\neach debt security.\u201d<\/p>\n\n\n\n
\u201cThe cap on sectoral limit of 25% shall be reduced to 20%. The additional\nexposure of 15% to HFCs shall be restructured to 10% to HFCs and 5% in\nsecuritised debt,\u201d said SEBI in a statement.<\/p>\n\n\n\n
In a further tightening, promoters, promoter groups and persons acting in\nconcert (PACs) will need to disclose the reason for creating an encumbrance as\nsoon as 20% of their share capital is leveraged.<\/p>\n\n\n\n
SEBI also approved the framework for issuance of differential voting rights\n(DVRs) and introduction of superior voting rights for tech companies, which\nwill be effective from July 01, 2019.<\/p>\n\n\n\n
Welcoming SEBI\u2019s move to allow DVRs for Indian tech companies, Bhavish\nAggarwal, founder, Ola, in a tweet said, \u201cI\u2018m certain this will encourage\nIndian companies to list within the country, backed by our own people. Made in\nIndia businesses and entrepreneurs can control their destiny and build for the\nworld!.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
In a reaction to a series of credit-related events that put investor money at risk, markets regulator Securities and Exchange Board of India (SEBI) tightened norms on investments by mutual funds (MFs). Vowing to take action against MFs getting into standstill agreements with the promoters of companies, SEBI Chairman, Ajay Tyagi said, \u201cWe don\u2019t recognise […]<\/p>\n","protected":false},"author":13,"featured_media":2933,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[45],"tags":[82],"class_list":["post-2932","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-current-affairs-articles","tag-economy-current-affairs"],"_links":{"self":[{"href":"https:\/\/www.gkseries.com\/blog\/wp-json\/wp\/v2\/posts\/2932","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.gkseries.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.gkseries.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.gkseries.com\/blog\/wp-json\/wp\/v2\/users\/13"}],"replies":[{"embeddable":true,"href":"https:\/\/www.gkseries.com\/blog\/wp-json\/wp\/v2\/comments?post=2932"}],"version-history":[{"count":2,"href":"https:\/\/www.gkseries.com\/blog\/wp-json\/wp\/v2\/posts\/2932\/revisions"}],"predecessor-version":[{"id":2935,"href":"https:\/\/www.gkseries.com\/blog\/wp-json\/wp\/v2\/posts\/2932\/revisions\/2935"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.gkseries.com\/blog\/wp-json\/wp\/v2\/media\/2933"}],"wp:attachment":[{"href":"https:\/\/www.gkseries.com\/blog\/wp-json\/wp\/v2\/media?parent=2932"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.gkseries.com\/blog\/wp-json\/wp\/v2\/categories?post=2932"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.gkseries.com\/blog\/wp-json\/wp\/v2\/tags?post=2932"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}