HEADLINES:
December 14 2018
SEBI beefs up corporate governance norms for listed companies
29 March 2018

It has decided to reduce the maximum number of directorship from 10 to seven in a phased manner.

MUMBAI: The Securities and Exchange Board of India (SEBI) has tightened the corporate governance norms for listed companies by accepting most of the recommendations of the Kotak Committee while also strengthening the regulations for derivatives and algorithmic trading.

At the board meet held on Wednesday, the capital market regulator decided to reduce the maximum number of directorship from 10 to seven in a phased manner while expanding the eligibility criteria for such directors. The regulator has also enhanced the role of audit committee along with the nomination, remuneration and risk management committees of the companies.

Listed companies will also be required to make enhanced disclosures related to related party transactions and subsidiaries.

For equity derivatives, the regulator has decided to move towards physical settlement for all stock derivatives in a phased manner to "facilitate greater alignment of cash and derivative market."

Meanwhile, measures to strengthen the guidelines for algorithmic trading include stock exchanges providing tick-by-tick data feed free of cost to trading members, tweaking the penalty framework to minimise orders that are way off the mark and enhancing certain disclosure requirements for stock exchanges.

For mutual funds, the regulator has brought down the cap for expenses charged for each of the schemes. The maximum limit has been reduced from 20 basis points of the daily net assets of the schemes to 5 basis points.

 

 

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