SEBI Proposes Major Reforms to Rights Issues Regulations

The Securities and Exchange Board of India (SEBI) has proposed to streamline rights issue regulations by rationalizing disclosure requirements and reducing processing time. The proposals include the appointment of a monitoring agency, allowing selective investor allotment, and relaxing renunciation restrictions for promoters. Public comments on these proposals are invited till September 10.

The Securities and Exchange Board of India (SEBI) introduced a set of proposals on Tuesday aimed at transforming rights issues into a preferred route for fundraising. The proposals focus on reducing disclosure requirements and processing times.

A significant recommendation is the appointment of a 'monitoring agency' to oversee the use of proceeds from rights issues. Currently, issuers offering securities worth less than ₹50 crore are exempt from this requirement.

Furthermore, SEBI has suggested allowing selective investor allotment in rights issues and easing renunciation restrictions for promoters. Public comments on the proposals are open until September 10.

(With inputs from agencies.)