Sebi lowers broker fees by 25%; goes digital on all payments

MUMBAI: The Securities and Exchange Board of India (Sebi) on Saturday tightened merger and acquisitions norms , lowered fees for brokers, allowed mutual funds to invest in real estate and infrastructure investment trusts and permitted celebrity endorsements of mutual funds At its board meeting in Jaipur, the regulator decided that in case of merger of an unlisted company with a listed entity, it would have to meet the minimum public shareholding requirement of 25% . 

The holding of pre-scheme public shareholders of the listed entity and the qualified institutional buyers of the unlisted company, in the post scheme shareholding pattern of the “merged” company shall not be less than 25%. The objective is to have wider public shareholding and to prevent very large unlisted company to get listed by merging with a very small company,” Sebi said in a press statement posted on its website. 

The regulator said unlisted company would be allowed to be merged with a listed company if it is listed on a stock exchange having nationwide trading terminals. Besides, companies would have to obtain public shareholders approval through e-voting if the schemes involving merger of an unlisted company results in reduction in the voting share percent of pre-scheme public shareholders by more than 5% of total capital of merged entity. This would also apply in the case of shares of unlisted subsidia. The regulations attempt to ensure the rights of the public shareholders are protected and also get them greater look in on mergers with unlisted subsidiaries,” said Sanjeev Krishan, partner & leader-deals, PwC India. 

The Sebi board also allowed mutual funds to invest in hybrid instruments such as real estate investment trusts(REITs) and infrastructure investment trusts (InvITs).