Sebi board meeting: PMS rules overhaul, FPI commodity trades among key decisions to watch out
Sebi's upcoming board meeting aims to discuss significant changes to portfolio management services and settlement regulations. Proposed revisions could allow discretionary portfolio managers to make new types of investments, including overseas assets. The meeting is expected to review widening the accredited investor framework to increase market participation. Another key focus is enhancing…
A crucial Sebi board meeting on September 24 is anticipated to address various capital-market reforms, including modifications to portfolio management services (PMS), settlement rules, accredited investors, commodity derivatives, and REIT-InvIT fundraising. The agenda is expected to encompass around a dozen proposals, many of which have undergone consultation.
One of the most significant proposals is the overhaul of Portfolio Management Services regulations. The regulator aims to permit discretionary portfolio managers to invest in pre-IPO securities and unlisted debt. Additionally, a new mutual fund-PMS category is proposed, enabling PMS products to invest solely in mutual funds with a reduced entry threshold compared to conventional PMS products.
The Sebi board is also expected to consider expanding the accredited investor pool to include individuals with securities-market assets of Rs 5 crore and body corporates with assets of Rs 20 crore. This move aims to broaden the eligible accredited investor base to approximately 4 lakh, up from the current 1 lakh.
Another key area under scrutiny is the proposed overhaul of settlement regulations. The draft framework seeks to simplify the calculation of settlement amounts, making it a more viable option in enforcement cases while preserving deterrence. The proposed changes include lower values linked to different stages of proceedings, a balanced treatment of mitigating and aggravating factors, and revised approaches to determining base amounts.
The board may also examine the possibility of introducing a common advertisement code for all Sebi-regulated entities, replacing the current entity-specific and exchange-specific advertisement codes. This proposal aims to reduce regulatory overlap and ensure consistency among regulated entities.
Foreign portfolio investors (FPIs) may gain wider access to commodity derivatives on recognized domestic exchanges. The regulator is considering allowing FPIs to participate in physically settled non-agricultural commodity derivative contracts, subject to safeguards.
Additionally, the board may deliberate proposals linked to Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs). These proposals include the issuance of depository receipts by REITs and listed InvITs backed by their units, enabling them to raise foreign capital through overseas exchanges. The framework may also allow minority stakes in under-construction third-party projects within existing exposure limits.
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