New Take Over Code and other Announcements by SEBI

Following is the excerpts of the new regulatory announcements by SEBI on Today 28^th July 2011:

• Open Offer: The open offer trigger of 15% has been increased to 25% while the mandatory requirement of open offer for remaining 26% has been set out instead of earlier 20%. It is notable that the take over committee formed under C Achuthan has proposed 100% open offer size. While the trigger level is in line with that of panel's proposal.
• The provision of non-compete fee has been completely scrapped. And all shareholders will be given exit opportunity at same price.
• The mutual fund companies can charge Rs.100 to existing investor on every new investment, while it can charge Rs.150 to a completely new mutual fund investor. This charge will be applicable for investment over Rs.10,000 only.
• According to changes in mutual fund advertising code, from now on mutual funds will not write CAGR return in advertisements, rather will write that how much a particular sum of rupees invested in so and so scheme turned out to be so and so rupees in so and so years.
• The size of the IPO forms will be reduced to fourth of what is present. Also the sequence of information printed in it will be changed to better understanding of retail investors. Also the lead merchant banker will put its past track record in it. Also from now on the secondary market investor would have to sign at one place only instead of 50 places. Also there would be a single form for asba and non-asba(application supported by blocked amount).
• Sebi has proposed for a KYC regulator. This regulator will be the single authority for all type of KYC for all type of investors/entities regulated by Sebi. This regulator will be registered with Sebi. KYC will also become uniform for all.
• Sebi has also announced opening of new regional offices at Hyderabad, Lucknow, and Guvahati in the first phase. And opening more offices in next phase in an attempt so that retail investors can reach out to it.
• Sebi has also proposed new law for regulating alternative investments and fund management.
• AMCs will be allowed financial entities to keep common set of fund management and research people for different pooled assets like offshore funds and pension funds. Till now they were required to keep separate people for all.
• Sebi chairman U K Sinha said that the TAKE OVER REGULATIONS ADVISORY COMMITTEE’S (TRAD) recommendations have been largely accepted.
• As per the liaison with Finance Ministry, the new rules for Debt Infra Fund has been put in place.
• Sebi has also said for a reconsideration of clean chit given by C B Bhave led Board to NSDL in much uproared IPO Scam.

Please come back to read our analyst team’s comments on the announcements and more updates.