The Economic Times - - Finance & Commodities -

may have to tweak their busi­ness model and style of op­er­a­tions as they pre­pare to share the fol­low­ing in­for­ma­tion:

** The en­tire process flow of reg­is­ter­ing an in­vestor/com­pany ** Whether there is any re­stric­tion on the type of in­vestors who can reg­is­ter on a plat­form

** The en­tire process flow in­volved in fund rais­ing ac­tiv­ity by a startup ** The min­i­mum sub­scrip­tion amount for an in­vestor to in­vest in a startup ** De­tails of com­pa­nies which have raised funds till date, num­ber of in­vestors who put money, and na­ture of se­cu­rity – stock, bond, or hy­brid

** Whether the plat­form is com­ply­ing with the pri­vate place­ment norms as stip­u­lated un­der Com­pa­nies Act 2013; and, if so how does a plat­form en­sure that all the pro­vi­sions of the law are com­pli- ed with at the time of fund rais­ing

** Lastly, whether sec­ondary mar­ket trad­ing is per­mit­ted on such plat­forms? If yes, the steps in­volved in the sec­ondary mar­ket trad­ing.

“Sebi’s con­cerns are rea­son­able in view of the in­crease in such plat­forms… Fund-rais­ing on unau­tho­rised elec­tronic plat­forms has been on the radar of reg­u­la­tors in In­dia and abroad for some time,” said Su­mit Agrawal, founder, Su­van Law Advisors. “In the In­dian con­text, Sebi and the gov­ern­ment should look at reg­u­lat­ing them to en­sure an au­dit trail of trans­ac­tions. How­ever, en­try norms for such plat­forms should not be same as stock ex­changes. Else, it could scut­tle in­no­va­tion and en­trepreneur­ship,” said Agrawal.

The reg­u­la­tor has sought the in­for­ma­tion un­der Sec­tion11of SEBI Act 1992 which em­pow­ers it to act in any man­ner as it thinks fit to pro­tect the in­ter­est of in­vestors. In Au­gust 2016, Sebi had cau­tioned in­vestors about fund rais­ing on un­reg­u­lated elec­tronic plat­forms. A year later, it is be­gin­ning to scru­ti­nise the world of startup fund­ing.

Ac­cord­ing to a Sebi of­fi­cial, a team set up by the reg­u­la­tor is ex­am­in­ing whether such fund mo­bil­i­sa­tion is a ‘deemed pub­lic is­sue’

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