Sebi issues stricter regulations for mutual funds, promoters pledge
Sebi board took a call on key changes over credit rating firms, promoters' pledge of shares, liquid funds and royalty payments
Mumbai: Securities and Exchange Board of India (Sebi) declared a slew of regulations after its board meeting on Thursday. There is a need to improve enforcement on all fronts, said Sebi chairman Ajay Tyagi.
Sebi board took a call on key changes over credit rating firms, promoters’ pledge of shares, liquid funds and royalty payments.
At its board meeting, the market regulator deliberated on issues concerning shares held by promoters and the mutual fund industry’s exposure to these financial instruments.
Sebi approved a framework for issuing differential voting rights, issued fresh guidelines for pledged shares.
The market regulator said liquid mutual fund schemes will have to hold at least 20 per cent in liquid assets like Gilts.
Sebi said royalty payments over 5 per cent will be considered material, banned mutual funds from entering into standstill agreements with companies.