In its board meeting today, Securities and Exchange Board of India (SEBI) made some decisions including tightening of disclosure norms for promoter share pledges. It also announced new regulations for liquid mutual funds to make them safer and more liquid. These funds schemes will have to invest at least 20 percent in liquid assets like government securities gilts.
The framework to for issuance of differential voting right (DVR) share issues for tech startups wanting to list on Indian bourses was also approved with effect from 1 July 2019. New rules were targeted at helping tech startups with asset light business models where the promoter or founder is key to the success of the company to maintain control.
SEBI said that tech companies having superior rights (SR) shares would be permitted to come out with IPO and if the SR is a part of the promoter group and his/her net worth does not exceed Rs 500 crore.
Further, companies seeking to pay royalty over 2 percent will require to seek shareholders' nod. Any payment of over 5 percent of sales will be considered material, SEBI said.