SEBI Registered Stock Market Advisory Company

SEBI Registered Stock Market Advisory Company

New Delhi: stock market regulator SEBI

SEBI-Securities and Exchange Board of India  Has changed many rules, taking major decisions. During the Corona virus epidemic on Thursday, the task of raising funds for companies was simplified. Under this, it has been decided to temporarily relax the pricing rules for allocation of shares on preferential basis. Also, the rule related to open offer has also changed. Experts say that this decision will boost stocks of companies with small and good business model. So investors have a good chance 

Know about the decisions of SEBI-

(1) While granting temporary relief, SEBI said that in the issue of preferential allotment, there would be an alternative to pricing methods. In the event of adopting new options, it will be necessary to hold such shares for three years. That is, it will have a lock-in period of three years. This option of preferential value will be available from 1 July 2020 or the notification date of amendment to the regulation, whichever is later, till 31 December 2020.

 (2) Bhavin Shah, Partner and Head (Financial Services Tax), PwC India said that the change in guidelines is a much awaited change. This will please the promoters as well as the investors. He said that many deals were stuck due to non-matching between the regulatory minimum level and the current market situation. This amendment has cleared the way for many deals. Also, this will improve the cash position of many companies.

(3) With this, SEBI has also approved the purchase of shares during the open offer. In the case where the open offer is publicly announced, the full amount for indirect acquisition must be submitted two working days before the date of the detailed public statement. If the open offer is delayed due to the acquirer, all shareholders who have offered shares in the open offer will have to pay 10% simple interest.

(5) In addition, the regulator will also amend the insider trading prohibition rule. It will have to maintain a digital database containing the nature of the unpublished sensitive price information and the names of those who have it. It also includes, among other things, automation of the process of informing the stock markets and restricting the trading window.

(6) Apart from this, SEBI has also decided to make the disposal rules good to make the processes fast and effective. Sebi said that instead of issuing a disposal notice under the settlement rules to save time, a paragraph would be included in the show cause notice to inform the concerned party about filing a disposal application. The Board of Directors also approved the SEBI Annual Report 2019-20. This will be entrusted to the Central Government.

What is a preferential allotment

Share the choice. 'Any company gives these shares to its chosen investors and promoters. Investors with preferred or preferred shares are more secure than equity shareholders.

This is because if such a company is on the verge of bankruptcy, such shareholders are preferred to pay more capital than ordinary equity shareholders.