SEBI issues regulations on sale of preference shares

MUMBAI Sat Mar 9, 2013 11:29am IST

A broker looks at a computer screen at a stock brokerage firm in Mumbai July 6, 2009. REUTERS/Arko Datta/Files

A broker looks at a computer screen at a stock brokerage firm in Mumbai July 6, 2009.

Credit: Reuters/Arko Datta/Files

Related Topics

MUMBAI (Reuters) - The Securities and Exchange Board of India (SEBI) has introduced regulations overseeing the public sale of preference shares and will allow hybrid securities, which debt and equity components, to be listed on exchanges.

SEBI said non-convertible redeemable preference shares sold by Indian issuers must have a minimum rating of "AA-minus" and a tenure of at least three years, according to its statement late on Friday.

Although Indian companies have previously issued preference shares, SEBI had not unveiled specific regulations covering the sale of these securities, which provide dividends and priority over stock investors in recouping investments in cases of defaults, but do not confer voting rights.

Private placements of preference shares will also be allowed to be listed in exchanges, SEBI said, a move that is intended to create a market for the trading of these securities.

Domestic banks will also be allowed to count some preference shares and perpetual debt instruments as part of their Tier I capital, after SEBI adopted the Basel III recommendations on the subject as part of the measures announced on Friday.

SEBI additionally simplified the registration process for stock brokers, allowing them to obtain a single certificate from an exchange to trade across all equity instruments.

Previously brokers had to register separately for each category of equity products, such as derivatives.

(Reporting by Rafael Nam and Abhishek Vishnoi; Editing by Michael Perry)

FILED UNDER:
Photo

After wave of QE, onus shifts to leaders to boost economy

DAVOS, Switzerland - Central banks have done their best to rescue the world economy by printing money and politicians must now act fast to enact structural reforms and pro-investment policies to boost growth, central bankers said on Saturday.

Reuters Showcase

Facebook Earnings

Facebook Earnings

Facebook tops Wall Street revenue target in 4th quarter.  Full Article 

Japanese Hostage

Japanese Hostage

Islamic State said to set new deadline for hostage swap  Full Article 

Cricket World Cup

Cricket World Cup

Batting holds key for team India in World Cup  Full Article 

Australian Open

Australian Open

Sharapova eases into fourth Melbourne final  Full Article 

Photo

Laser Pioneer Dies

Laser's co-inventor, Nobel laureate Charles Townes, dead at 99  Full Article 

Rohingya Muslims

Rohingya Muslims

Rohingya refugees say traffickers in Malaysia abuse and kill.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage