By Admin 
Sebi rules change: The Securities and Exchange Board of India (SEBI) on Wednesday took some important decisions, whose aim is to reduce regulatory burden as well as to promote startups to bring IPOs and encourage foreign investment. These decisions were taken in the board meeting held under the chairmanship of SEBI President Tuhin Kanta Pandey.
Startups exemption Esop Holdings
Giving relief to startup companies, SEBI has given a decision that the startup companies whose founders are planning to bring IPOs, they can keep the ESOP (Employees Stock Options Scheme) a year before filing draft Red Herring Prospectus (DRHP), while earlier if a startup used to go to the IPO, then the founders used to keep their own. It was not allowed.
This change in the rule shows that many startup founders work on low salary and for years instead of equity. This decision of SEBI will help them to advance long term growth.
Overall, according to SEBI’s new rule, if someone is preparing to bring a startup IPO, then the founder of that company will still be able to keep ESOP with him, even if it has become a promoter. However, to prevent its misuse, SEBI has placed a ‘cooling of’ period of one year, that is, the founders will be allowed to keep the ESOP issued at least one year before the IPO.
New framework for psu delisting
Taking another major decision in the meeting held on Wednesday, SEBI has also given relief to the public sector companies (PSU). Under this, a new structure has been approved for the companies that have more than 90 percent stake in the government. That is, after the approval of shareholders, now PSU companies can be easily removed from the stock market.
Whereas earlier this process was considered quite complicated or you say that PSU was permission to withdraw from the stock market. This change of SEBI will allow PSU to withdraw from the stock market to its will, provided the government has 90 percent or more stake.
Easy rules will be easy for foreign investors
To attract foreign capital in the long term, SEBI has also simplified the rules for foreign investors who only want to invest in Indian government bonds. The risk in these bonds is low, so SEBI is making registration and compliance requirements easier. This will promote foreign investment in Indian debt securities.
Changes in FIF’s Frame Framework
SEBI has also made changes to benefit the alternative investment funds (FIF). SEBI has also proposed a change in the structure of co-investment within the FIF. This gives big investors an opportunity to invest more in those private companies, where AIF has already invested. Its purpose is to help large investors participate more directly in promising deals.
Demat stock compulsory for IPO documents
Before bringing the IPO, SEBI has made it mandatory to keep the directors of the company, prominent managing staff and select shareholders as demat. This will make it easier to bring IPOs as transparency increases.
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