Sebi for greater transparency by market entities, promoters

Mumbai, Feb 7 (PTI) In its last major decisions under C BBhave''s leadership, Sebi today tightened noose around erringmarket players, promoters and investors, while streamliningthe public offer bidding process and grant of licences.

But a decision was elusive at a Sebi board meeting onrevising rules for company takeovers as also for newregulations for the way stock exchanges are owned and didbusiness.

The regulator decided to bring in a greater oversight onbrokers, mutual funds, bankers and other market entities bylimiting their initial licence to five years and said it wouldbe renewed into a permanent one based on their track record.

The move would also save the market intermediaries thepain of seeking renewals every year.

The decisions were taken at the Sebi board meeting underchairmanship of Bhave, whose term ends on February 17.

He would be succeeded by U K Sinha, head of fund house UTI AMCand chairman of mutual fund industry body Amfi.

Sebi also decided to suggest to the government to put inplace checks to avoid incidents like Satyam scandal beingrepeated.

In this regard, Sebi said that it would suggest theMinistry of Corporate Affairs to put in place a clause in thenew Companies Bill to bar any investors, including promoters,from voting on any matters where they have an interest.

In Satyam case, the board members, including the nomineesof promoters, had decided to acquire two companies -- MaytasInfra and Maytas Properties -- promoted by the family membersof Raju family, the promoters of the IT firm.

Taking a cue from Satyam case, it was decided thatsuggestion would be made to MCA that for passing resolutionswhere one of the investor has conflict of interest, theinterested investor should not be allowed to vote, Bhave said.

In another decision, Sebi made it less expensive forinvestors to buy shares in public offers and also rightsissues, where shares are sold to existing shareholders.

Sebi decided to make it mandatory for non-retail investorsto bid through ASBA -- a facility under which the money getsdebited from investors'' account only after share allotment.

The ASBA (Application Supported by Blocked Amounts)facility shall be mandatory for non-retail investors makingapplications in public/rights issues with effect from May 1,2011," Bhave said.

The move to grant licences initially for five years issaid to have been aimed to keep brokers, mutual funds,bankers, portfolio managers, depository participants and othermarket intermediaries under check for any possiblewrongdoings. .