The Securities and Exchange Board of India (SEBI) is scheduled to hold an important board meeting tomorrow, where three critical issues are set to dominate discussions: SME listing regulations, insider trading regulations, and rules regarding specified digital platforms (SPFs).
Among these, the tightening of regulations around small and medium enterprise (SME) listings is expected to be the most significant topic on the agenda. SEBI has received various suggestions in response to its consultation paper issued in November 2024, aimed at improving transparency and investor protection in the SME sector. Some of the key suggestions included:
- Raising the minimum application size to ₹2,00,000 or ₹4,00,000 from the current ₹1,00,000.
- Introduction of a draw of lot methodology for the High Net-Worth Individual (HNI) or Non-Institutional Investor (NII) category.
- Segmentation of NII category into small and large investors.
- Restricting the OFS portion to 20%-25% of the total issue size.
- Increasing the minimum allottees to 200 from the current 50.
The second critical issue under discussion is the potential expansion of the definition of Unpublished Price Sensitive Information (UPSI) under insider trading regulations. SEBI may consider including additional factors such as:
- Changes in company ratings
- Proposed fundraising activities
- Agreements affecting management control
- Company fraud
- Changes in Key Managerial Personnel (KMP)
Lastly, SEBI could also deliberate on regulatory measures concerning specified digital platforms (SPFs).
