SEBI has proposed an easier framework that allows more investor categories, relaxed shareholding norms and reduced trading lot amount.
NEW DELHI, 31st JULY 2016: As a step taken with a view to encourage listing of startups and create a positive ecosystem for startup in India. Securities and Exchange Board of India (SEBI) has proposed an easier framework that allows more investor categories, relaxed shareholding norms and reduced trading lot amount.
The move comes a year after SEBI proposed a startup listing platform that would allow India’s 3,100-odd early-stage firms to raise money from the primary market. But the concept never took off, owing to these clauses.
A discussion paper released by the market regulator has suggested easing of restrictive clauses on the shareholding structure of a firm that wants to raise money.
It proposed allowing non-institutional investors to subscribe to a higher portion of the offer and reducing the trading lot size.
SEBI had mooted changes to the framework of Institutional Trading Platform (ITP), which has not seen much traction, though it was put in place in August 2015.
Seeking to widen the eligibility ambit for getting listed on ITP, SEBI has proposed increasing the category of eligible investors when it comes to shareholding before the listing.
Besides QIBs (qualified institutional buyers), family trusts or systematically important NBFCs registered with the RBI, intermediaries registered with SEBI and category III FPIs (foreign portfolio investors) would be considered, subject to certain conditions.