This is SEBI’s attempt to check rising incidents in the stock market. Earlier, the reward amount was Rs 1 crore.
The Securities and Exchange Board of India (SEBI) has announced a big reward for the disclosers to check the increasing incidents of insider trading in the stock market. The market regulator on Tuesday said that anyone providing information about insider trading will now be rewarded Rs 10 crore.
After the decision, SEBI said in the board meeting that it has been approved to increase the reward amount by 10 times to prevent insider traders working against the market rules and to protect the interests of small investors. The process of its payment will also be simplified, for which the rules of the board will be changed.
Under the new rules, if the reward amount of the informer is Rs 1 crore or less, the same will be paid by SEBI after the final decision is taken. However, if this amount exceeds Rs 1 crore, the payment of Rs 1 crore will be made immediately after the final decision and the balance amount will be available after the release of the money by the board.
Independent directors will be appointed with the permission of the shareholders
SEBI has also made major changes in the rules for the appointment and resignation of independent directors in listed companies. The market regulator said the process of appointment, reappointment and removal of new independent directors would be completed only with the approval of the shareholders. If an independent director wants to become a whole-time director in his company, holding, subsidiary or subsidiary, a cooling period of one year has to be maintained.
It will be necessary to evaluate the person selected for this post in a transparent manner. In this, it is necessary to clearly mention the capabilities suitable to the post of the applicant. In addition to independent directors, all directors of the company will be appointed only with the approval of the shareholders.
If a person involved in the management or his relative is to be made an independent director, a cooling period of three years will have to be maintained. If the independent director resigns, the full information will already be sent to the board committee of the company. These changes will come into effect from January 1, 2022.
Minimum investment allowed to AMC
Asset Management Companies (AMCs) have now been allowed to invest a minimum of the amount raised as a new fund. SEBI said that in the schemes linked to AMCs, there will be an exemption for investment of minimum amount on the basis of risk. At present, under New Fund Offer (NFO) one per cent of the amount raised or Rs 50 lakh (whichever is less) is required to be invested.
These changes will also happen
- Small financial banks and payments banks will also be able to register as bankers in the IPO.
- The rules for debt securities and non-convertible debentures have been merged and made one.
- A separate framework will be developed for accredited investors.
- Non-resident Indian fund managers have been permitted to be part of Foreign Portfolio Investors (FPIs) and invest in their own schemes of mutual funds.
