Reform push: Sebi sets up 3 panels

Experts to advise changes to framework around FPI, takeover code and social stock exchanges

The Securities and Exchange Board of India (Sebi) has set up three separate committees in a push to reforming capital markets and improving ease of doing business. The committees will be widely represented by stakeholders and touch upon areas such as foreign portfolio investors (FPIS), takeover code and the newlyintroduced concept of social stock exchanges.

The 16-member FPI Advisory Committee (FAC) will be chaired by Hasmukh Adhia, a former finance secretary in the Indian government. It will include H R Khan, former deputy governor of the Reserve Bank of India, and R Subramanian, executive director with the RBI. The FAC will advise on issues pertaining to investments and operations of FPIS in Indian financial markets. It will review investment avenues for FPIS and advise on the feasibility of new ones and suggest measures to encourage FPI participation in the bond market. It will also suggest measures for simplifying FPI regulations and legal framework to enhance transparency.

FPI investments are needed for the development of the domestic capital markets. The FPI committee is being appointed at a time when Indian markets have seen record outflows by overseas investors. Also, FPIS have been at odds with the regulator over the shift to a shorter T+1 trade settlement cycle.

The 20-member committee on Review of Takeover Regulations will be headed by retired justice Shiavax Jal Vazifdar. It will have representation from industry bodies CII, FICCI and AIBI, along with stock exchanges and law firms.

The committee will advise on issues related to substantial acquisition of shares and takeovers. "It will also review the extant provisions of takeover regulations in light of past judicial pronouncements and various informal guidance issued by Sebi till date,” the regulator said.

The expert group will advise Sebi on the legal framework for simplification and strengthening of the takeover regulations by adopting appropriate global practices. Takeover regulations are crucial for boosting mergers and acquisitions. The committee's review comes at a time when the Indian market has seen an advent of newage companies without any ‘promoters'.