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Sebi proposes relaxed norms for start- up listing

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To encourage listing of startups, the Securities and Exchange Board of India (Sebi) on Friday proposed an easier framework that allows more investor categories, relaxed shareholding norms and reduced trading lot amount.
In this regard, the markets regulator has mooted changes to the framework of institutional trading platform (ITP), which has not seen much traction, even though it was put in place in August 2015.
The rules were brought in to encourage Indian startups and entrepreneurs to remain within the country rather than go abroad for raising funds.
Seeking to widen the eligibility ambit for getting listed on ITP, Sebi has proposed increasing the category of eligible investors when it comes to shareholding before the listing. Besides QIBs ( qualified institutional buyers), family trusts or systematically important non- banking financial companies ( NBFCs) registered with the Reserve Bank of India, intermediaries registered with Sebi and category III FPIs ( Foreign Portfolio Investors) would be considered, subject to certain conditions.
In the case of family trusts, NBFCs and Sebi- registered intermediaries, the net worth should be at least Rs. 500 crore.
Entities such as those having apooled investment fund with minimum assets under management of $ 150 million as well as those from a jurisdiction that is signatory to the International Organisation of Securities Commission’s multilateral memorandum of understanding would also be eligible.
The regulator has suggested tweaking the share allocation limit in entities listed on ITP.
Business Standard New Delhi,30 July 2016

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