Proposals issued by SEBI meeting report

SEBI Board meeting held in Mumbai on November, 2023 has approved the following suggestions to revise SEBI framework:

  1. Reduction in minimum issue size in case of public issuance of Zero Coupon Zero Principal Instruments (ZCZP) by NPOs on SSE from Rs.1 Crore to Rs. 50 lakh.
  2. Reduction in minimum application size in case of public issuance of ZCZP by NPOs on SSE from Rs 2 lakh to Rs. 10,000, thereby enabling wider participation of subscribers including retail.
  3. Changing the nomenclature of “Social Auditor” with“Social Impact Assessor” to provide comfort to NPOs and convey a positive approach towards the social sector.
  4. Permitting NPO to disclose past social impact report in the fundraising document as per their existing practice subject to disclosure of key parameters such as number of beneficiaries, cost per beneficiary and administrative overhead.
  5. More entities (NPOs) to be made eligible for registration and fund raising through issuance and listing of ZCZP on SSE by permitting entities registered under section 10(23C) and 10(46) of the Income Tax Act, 1961

In order to facilitate ease of compliance and to strengthen investor protection in Alternative Investment Funds (‘AIFs’), the Board approved the following proposals-

  1. Any fresh investment made by an AIF, beyond September 2024, shall be held in dematerialized form. The existing investments made by AIFs have been exempted from the said requirement, except in cases where –a. Investee company has been mandated under applicable law to facilitate dematerialization of its securities; and, b. Investments where the AIF, on its own, or along with other SEBI registered intermediaries/entities which are mandated to hold their investment in dematerialized form, has control in the investee company.
  2. Further, the said requirement is exempted for investments held by: Liquidation schemes of AIFs, Schemes of an AIF whose tenure (not including permissible extension of tenure) ends within one year from the date of issuance of necessary notification in this regard; and, Schemes of an AIF which are in extended tenure as on the date of issuance of the notification.