SEBI issues regulations on sale of preference shares
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)
- Tweet this
- Share this
- Digg this
- Modi to launch plan for every Indian household to have bank account
- More quakes jolt Iceland overnight, spread to second volcano
- U.S. strikes have slowed Iraq militants but not weakened them - Pentagon
- UPDATE 3-Time Warner Cable suffers major outage; New York launches probe
- UPDATE 2-Moscow courts back closure of three McDonald's branches
Jan Dhan Yojana
Prime Minister Narendra Modi will promise on Thursday to provide a bank account for every Indian household when he launches a major initiative that could save billions of dollars in welfare spending and help mend strained state finances. Full Article