SEBI Board Meeting: Key Agenda and Developments Amid Allegations

The Securities and Exchange Board of India (SEBI) held a crucial board meeting on September 30, 2024, in the wake of recent allegations and regulatory challenges. This meeting assumes significance as it is the first since Hindenburg Research leveled accusations against SEBI Chairperson Madhabi Puri Buch concerning conflicts of interest and employee grievances.

Approximately 300 employees of SEBI had addressed a letter to the Finance Ministry, raising alarm over what they described as a “toxic work culture.” The board meeting is poised to address these concerns amid public protests by the Indian Youth Congress, which has demanded the resignation of Chairperson Buch. The protests follow allegations linked to Buch’s prior affiliations, which have been highlighted by Hindenburg Research’s report.

Among the regulatory subjects on the agenda, the board is expected to deliberate on easing compliance norms for mutual funds and portfolio management services. This move aims to introduce more investor-friendly products and streamline regulatory processes. Discussions may also focus on changes to curb the unexpected increase in equity derivatives trading volumes.

Proposals on the table include new regulatory measures to mitigate losses in futures and options trading, an area where nearly 90% of retail investors have reportedly suffered financial setbacks. In addition, SEBI may propose expanding the definition of “connected persons” in the context of insider trading regulations to encompass a broader range of individuals.

SEBI’s board might also review recent amendments to simplify delisting procedures and fast-track the rights issue process, which is perceived as crucial for efficient capital raising by companies. The modifications could see the average approval time for rights issues significantly reduced.

In other developments, SEBI announced penalties for NSE Data and Analytics Ltd due to policy irregularities, reflecting the regulator’s ongoing scrutiny of compliance among key market entities.

Clearance for initial public offerings (IPOs) was granted to companies such as Vishal Mega Mart, ACME Solar Holdings, and Mamata Machinery, while the proposal by Innovision was returned for further review. These decisions reflect SEBI’s continued oversight and regulatory facilitation for market entries.