The capital markets regulator SEBI has made grading of initial public offerings by credit rating agencies voluntary for issuers. Earlier, IPO grading was mandatory.
Heeds to requestsSEBI has relaxed this norm following requests from investor associations and the Association of Investment Bankers of India, besides recommendation of its advisory committee. The move will help align with the principles laid down by the Financial Stability Board to reduce the reliance on rating agencies.
The SEBI board also approved the Settlement of Administrative and Civil Proceedings Regulations, subject to inclusion of the guidelines determining the settlement terms as part of regulations.
These regulations lay down the standalone common substantive procedure for settlement of administrative and civil proceedings under all the securities laws and formalise the already existing settlement process, besides providing for the guiding factors to deal with the settlement process.
However, serious offences, such as insider trading, are excluded from the scope of such settlement.
The process specifically defines the roles of the internal committee(s) and SEBI’s high powered advisory committee to impart transparency.
It also provides for terms of settlement in monetary/ non-monetary terms or a combination of both. The SEBI board approved the Procedure for Search and Seizure Regulations made on the lines of the provisions in the Income Tax Act.
It also amended the existing Investor Protection and Education Fund Regulations to enable utilisation of such amounts primarily for restitution (refund) to investors.
In case of failure to identify the investors, such amounts would be credited to the Investor Protection and Education Fund of SEBI.