Sebi Introduces New Asset Class, Eases Compliance for Mutual Funds

Sebi's board has cleared several new proposals, including the introduction of a new asset class for high-risk investors, relaxing compliance for mutual funds, and amendments to insider trading rules. Allegations against Sebi's chairperson were also addressed at the meeting.

The Markets regulator Sebi's board on Monday approved a new asset class aimed at high-risk investors, narrowing the gap between mutual funds and portfolio management services in terms of asset flexibility.

In a statement following the board meeting, Sebi announced relaxed compliance requirements for passively managed mutual fund schemes to streamline regulatory demands. In total, the board greenlit 17 proposals, including insider trading rule amendments and easing eligibility and compliance standards for investment advisers and research analysts.

This meeting was the first since US-based short seller Hindenburg Research and the Congress party made allegations against Sebi's chairperson, Madhabi Puri Buch. Hindenburg accused Buch and her husband of investments in foreign funds controlled by Vinod Adani, allegedly used to manipulate stock prices. Sebi has denied these allegations.

Additionally, the board approved a proposal for 'summary proceeding' to handle certain intermediary violations of securities laws more swiftly. The disclosure requirements in offer documents were rationalized, and rights issue processing time was reduced to make it a preferred fundraising route. Promoters will also be allowed to transfer their rights entitlement to select investors during rights issues.

(With inputs from agencies.)