Monday, May 23, 2016

SEBI’s board proposes top 500 listed Cos. to have mandatory dividend distribution policy

SEBI held its board meeting at Mumbai, on May 19, 2016 and approved of the following proposals:

1. Dividend distribution policy for top 500 listed Cos. SEBI proposed a new regulation that mandates listed firms to have a ‘dividend policy’. The new regulatory framework is likely to be applicable to top 500 listed companies initially based on their market value and then to other listed companies. SEBI said that dividend policy would help investors to get clear picture of return on investments and to make well informed decisions.

2. To amend Infrastructure Investment Trusts Regulations: In order to make the process of registration of Infrastructure Investment Trusts easier, the SEBI has approved for bringing out a consultation paper proposing certain changes/proving clarification in the SEBI (Infrastructure Investment Trust) Regulation, 2014. Further SEBI has proposed relaxation by way of reducing the mandatory sponsor holding to hold 10 % and allowing InvITs to invest in the 2 level special purpose vehicle.

3. Tighten norms for Offshore Derivative Instruments (ODIs): SEBI has proposed to tighten norms for offshore derivative instruments(ODI). Now Offshore derivative instruments issuers would need to adhere to the Indian know your client (KYC) norms and subscribers will have to take prior approval from ODI issuers in case of transfer of the instrument to another offshore investor. Further ODI issues will have to report all the transfers made among the instruments issued by them on a monthly basis to the SEBI.