Large announcements for startups and FPI in SEBI Board-Metting: PSU Delisting Rules became easy, also changes in the rules of IPO and QIP

1. Relief in ESOP for Startups

SEBI made a big announcement for startups. Now startups founders and employees will be able to keep their ESOP (Employee Stock Options) even after their company’s IPO (Initial Public Offer). Earlier these rules were strict, but now this exemption will help the startups to attract and keep talent. However, one year waiting period has been placed before the IPO to prevent misuse.

2. PSU Delisting Rules Easy The rules of delivery (ie stock market) for public sector companies (PSU) have been relaxed. Especially for those PSUs in which the government holds 90% or more. SEBI has prepared a special framework for this, which will make it easier for the government to deliver such companies.

3. Simple rules for foreign investors

SEBI has also taken a big step for foreign portfolio investors (FPI). That is, registration and compliance rules have been made easier for the FPIs who invest only in Indian government bonds (IGB). A new FPI category has been created for this, which will be called IGB-FPI. This will make it easier for foreign investors to invest in India’s bond market.

4. Equity status to Reits and Invits

Real Estate Investment Trusts (Reits) and Infrastructure Invitment Trusts (Invits) will now be considered as equity. This means that they will now be able to join the equity index. Also, mutual funds have been given an investment exemption up to 20%. This will provide new opportunities to invest in real estate and infra sector.

SEBI chairman Tuhin Kanta Pandey presided over.

5. Many reliefs for AIFS also

SEBI has also given several reliefs for Alternative Investment Funds (AIFs). Now AIF managers will be able to give their investors a chance to co-investments (ie in the same company). Also, AIF managers will now be able to advise all types of investors, whether their fund is invested in that company or not. This will increase the operational flexibility of AIFs.

6. Settlement Scheme in NSEL case

SEBI decided to bring a settlement scheme for brokers associated with the National Spot Exchange Limited (NSEL) scam. This scheme will help solve old hanging cases. The NSEL scam has been in discussion for many years and the move can provide relief to brokers with more than 300 show-cose notices.

7. Changes in the rules of IPO and QIP

SEBI also made the rules of IPO and qualified Institutional Placement (QIP) easy. Now a demat account will be mandatory for some special IPO shareholders. Also, the documents required for QIP have also been simplified, which will make it easier for companies to raise funds.

8. New rule for Angel Investors

SEBI has now recognized Angel Investors as Acradated Investors (AIS). He has also been given the status of qualified Institutional Buyers (QIBS), but it will only be for investment in Angel Funds. This will increase the participation of Angel Investors and will help the startups to get funding.

SEBI purpose: Make business easier

SEBI chairman Tuhin Kanta Pandey said, “All these proposals were earlier discused through consultation papers and were brought to the board after advice from the committees.” SEBI’s focus is to promote innovation in the market, to give more opportunities to investors and make the process of doing business easier.

These decisions will further strengthen India’s capital market and will benefit everyone from startups to big investors. SEBI’s move is an attempt to make India more attractive for global investment.