The Securities and Exchange Board of India (SEBI) has authorised several measures to give shareholders more authority, in addition to asking the large listed corporations to disclose significant events on the stock markets in a clear and understandable manner. By ensuring that funds don't need to remain with stock brokers for an extended amount of time, the SEBI also provided small investors more control over the money they invest. Let's examine how these reforms are intended to benefit investors. To increase corporate governance permanent board members for publicly traded businesses are being phased out by the SEBI board. Every five years, board seats would be up for election, and directors would need shareholder approval to serve. The market regulator stated that shareholders of a listed business must periodically approve any special rights provided to them. This will probably lead to better corporate governance standards. The top 100 market-listed businesses have been instructed by SEBI to be explicit about disclosures surrounding major or material developments. To increase openness and ensure prompt disclosure of "material occurrences," it has ordered them to validate or refute market rumours that influence share prices. For the top 100 firms in terms of market capitalization, this rule will take effect on October 1, 2023, and for the top 250 companies, it will begin on April 1, 2024. SEBI has also established a method that enables an investor to block cash in their bank accounts rather than sending them upfront to brokers before performing secondary market deals to protect ordinary investors. A comparable framework is in place for IPOs which will intend to avert embezzling of investor funds, brokers default and the risk revolving around investors capital. SEBI has also decided to tweak rules regarding mutual funds by allowing private equity firms to be the main shareholder in an Asset Management Company (AMC) which runs a mutual fund. It said that the private equity firm should have a minimum of 5 years of experience in managing funds and investing in the financial sector. As of now, only financial services firms & corporates were permitted to back an AMC. SEBI has also approved providing an Applications Supported by Blocked Amount (ASBA)-like facility for trading in the secondary market by enabling stock brokers to directly settle brokerage payments with UPI clients or using Cash Credit facility to have the basic rate of brokerage deducted from the UPI block of the clients though keeping it optional for both investors & brokers. Also, ₹330 billion in funds to support the corporate debt market has been authorised by SEBI where they will intervene to purchase illiquid securities in crisis scenarios. The goal of the revisions, according to SEBI chief Madhabi Puri Buch, is to "ensure that the spirit of a legislation is followed and not simply the letter." Thank you.
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