SEBI New Rules / Big news for stock marketers! SEBI changed many big rules of mutual funds

SEBI Changed Rules: SEBI has made changes in many rules for the investors of the stock market. This will reduce the risk on investors investing in IPOs and mutual funds. SEBI has also made rules for the proper utilization of the funds raised along with fixing the withdrawal limit and timing of the anchor investors of the IPO. If you also do not know these rules, then let us know about them.

The Securities and Exchange of India (SEBI) has increased the lock-in period of anchor investors considered most important for IPOs from 30 days to 90 days, while also capping their withdrawal limit to 50 per cent.

Companies raising funds from IPO will now be able to use only 25 percent for in-organic work, while 75 percent of the amount will have to be invested in business expansion. The lock-in period for promoters holding 20 per cent stake in an IPO has been reduced from three years to 18 months, while for promoters holding more than 20 per cent stake, the lock-in period has been reduced from one year to six months. Similarly, before winding up mutual fund schemes, the fund house will have to take the permission of the unit holders. These rules will be applicable to IPOs that come after April 1, 2022.

Know what will happen in the new rule

- Shareholders or anchor investors holding more than 20 per cent stake in an IPO will no longer be able to sell their entire stake on the day of listing. Such shareholders will be able to sell only 50 per cent of the total stake on the day of listing.

- Investors will also benefit from disclosure rules related to the use of IPO money. Companies will now be able to use only 25 percent of the amount for in-organic funding, while 75 percent of the amount will have to be used for business expansion.

- By changing the rules of the price band of IPO, its scope has been increased. Now the difference between the floor price (base price) and upper price of an IPO will be at least 105 percent.

- If the fund house now wants to close any mutual fund scheme, then they have to first take permission from the unit holders. The fund house will have to follow the Indian Accounting Standard from 2023-24, in which voting will be done by the investors to close a scheme.

- There will be one vote per unit, which will have to be disclosed within 45 days. If the investors voted against discontinuing the scheme, it would have to be restarted and the investors would be able to withdraw their money from that scheme.

- According to SEBI, it will now be mandatory for companies to submit an application for settlement within 60 days of receiving show cause or supplementary notice.

- SEBI had implemented the settlement rule in January 2019. According to this, in case of any mistake, companies can settle the matter with SEBI by paying fees. If there is any revised settlement in this, then it has to be completed within 15 days. Under this, all payments will be taken only from the payment gateway.

Changes in the rules of foreign investors

SEBI has also changed the rules related to foreign investors. Now while registering the FPO, a special registration number will be given along with the general information. With this, securities can be issued in the form of demat on demand of duplicate shares by the investor. This move will make the transaction easier for the investors and also increase their security.

Special status fund

It has also been decided in this meeting that SEBI will bring Special Status Fund (SSF) for investors willing to invest in risky assets. Its minimum corpus will be Rs 100 crore, while the minimum investment will be Rs 5 crore and Rs 10 crore. SSF will be floated as a category of Alternative Investment Fund (AIF).