SEBI revamps delisting, F&O inclusion norms; restricts finfluencers | Key points

Securities and Exchange Board of India (SEBI), in its board meeting held on Thursday, gave nod to a spree of proposals ranging from the tightening of norms for finfluencers to the revamping of process for future & options (F&O) inclusion and voluntary delisting.

SEBI Chairperson Madhabi Puri Buch, who addressed the media following the board meeting, said an expert committee will be formed to look into the implications of retail investors making speculative bets in the F&O segment.

Here's a look at the key decisions taken by the SEBI board:

Fixed price process for voluntary delisting

The SEBI board has approved the introduction of fixed price process as an alternative to reverse book building process (RBB) for delisting of companies whose shares are frequently traded.

The fixed price offered by an acquirer shall be with at least 15% premium over the floor price as determined under delisting regulations.

The apex market regulator also gave nod for the introduction of an alternate delisting framework for listed Investment Holding Companies (IHC) through "scheme of arrangement by way of selective capital reduction", an official release noted.

As per the revised norms, a Listed IHC hat has at least 75% of their fair value (net of liabilities) comprising direct investments in equity shares of other listed companies will be permitted to transfer the underlying equity shares held by it in other listed companies to its public shareholders proportionately.

The IHCs will also be permitted to make proportionate cash payments to its public shareholders against other assets including investments in land, building, unlisted companies etc.

On entire public shareholding being extinguished, the IHC shall be delisted, SEBI said.

F&O entry and exit criterias tweaked

According to the revised framework, the eligibility criteria for entry of stocks in the derivatives segment will be based upon performance of stocks in underlying cash market.

The stock’s Median Quarter Sigma Order Size (MQSOS) over the last six months, on a rolling basis, shall not be less than ₹75 lakh.

The stock’s market wide position limit (MWPL) on a rolling basis shall not be less than ₹1,500 crore.

The stock’s average daily delivery value (ADDV) in the cash market, in the previous six months on a rolling basis, shall not be less than ₹35 crore.

For the exit of stock, a revised framework has been approved. This would be applicable for only stocks that have completed at least six months in the derivative markets. The following will be the criteria for the stock's exit:

• At least 15% of trading members active in all stock derivatives (trading member who has traded during the month) or 200 trading members, whichever is lower, shall have traded in any derivative contract on the stock being reviewed on an average on monthly basis during the review period.

• Trading on a minimum of 75% of the trading days during the review period in derivatives segment.

• Average daily turnover (futures + options premium) of at least ₹75 crore during the review period

• Average daily notional open interest (futures + options notional) of at least ₹500 crore of that particular stock during the review period.

Restriction of finfluencers

The SEBI board approved the rules that aim to bar the relationship between regulated entities and unregistered financial influeners, also known as finfluencers.

The regulated entities should "not have any association, like, any transaction involving money or money’s worth, referral of a client, interaction of information technology systems or any other association of similar nature or character, directly or indirectly, with any other person who, directly or indirectly, provides advice or recommendation or makes any implicit or explicit claim of return or performance", SEBI said in a release.

However, the restrictions will now apply on persons who are exclusively engaged in investor education and do not, directly or indirectly, provide advice, recommendation, or claim of return, it added.