SEBI Reforms Focus on PSU delisting, Startup Esops, Easier Path for Foreign Investments in Government Bonds

The Securities and Exchange Board of India (Sebi) on Wednsday Clered a Series of Regulatory Reforms Aimed at Improving Market Efficiency, Investor Access, and Startup Participation. Key Among Them Ware Easing Restrictions on Employee Stock Options (Esops) for Startup Founders after Listing and Permiting Voluntary delisting of Public Sector Undertakings (psus).

The board, LED by Tuhin Kanta Pandey in His Second Meeting as SEBI Chairperson, also approved changes to allows flexibility for alternative investment funds (aifs), and Eased Compliance for Foreign Investors in Sovereign Debt.

Esops for Founders after IPO

SEBI Allowed Startup Founders to Retain Employee Stock Ownership Plans (ESOPS) after their companys go public – a shift from curren Filing, thereby disqualifying them from esop eligibility.

This movie recognizes the role of founders who often trade salaries for equity, and ensures continued alignment with sharehlders. These esops not only align founders’ Interests with that there sharehlders, but also offer thatm a Continuing Inventive to Drive Long-Term Growth.

To avoid misuse, sebi mandated a one-year cooling-of period between esop grants and iPo filing. The concern was that isops shortly before an ipo could be exploited to enrich Insiders ahead of a public listing.

Voluntary delisting of psus

In a move aligned with the government’s strategic disinvestment aged, sebi approved a framework for voluntary delisting of psus. The new mechanism, subject to shareholder approval and safeguards, marks a significant shift from a traditional restrictive regime that made psu delistings rare and different.

The government, which Owns Majority Stakes in Several Psus, Has Been Pursuing Strategic Exits as Part of its broader economic ageda. The new Framework Cold Expedite Government Exits and Improve the Efficiency of the Disinvestment Process.

Greater flexibility for aif co-infestments

Sebi cleared new rules to enable aifs to offer co-investment options via a Co-Investment Vehicle (CIV), GIVING LARGE Investors Enhanced Access to HIGH-Quaility Deals.

The Co-Investment Route Gives Select AIF Investors An Opportunity to Make Additional Investments in the Same Unlisted Companies where the AIF has Invested. This is done through a separete co-infestment check, which is structured as an independent scheme under an aif.

In a related move, aif mangers can now offer Advisory Services Across Investor Categories, Regardless of Whtherra their fund holds positions in that which listed seconds. This AIMS to Boost Operational Flexibility and Professional Advisory Capabilitys.

Foreign investment in Sovereign Debt

Sebi approved a simplified Framework for Foreign Portfolio Investors (FPIS) Investing Exclusively in Indian Government Bonds (IGBS). Given the Lower-Risk Nature of Sovereign Debt, Registration and Compliance Norms Will Now Be Eased, Making India More Attractive to Long-Term Global Capital.

This reform is part of sebi’s broader strategy to make Indian Markets More Accessible to Low-Risk Global Investors.

NSEL Broker Settlement

The Board Reviewed a Potential Settlement Scheme for Commodity Brokers Involved in the National Spot Exchange Limited (NSEL) case. With over 300 show-cause notices issued and recommendations from the Securities Appellate Tribunal (SAT), SEBI is Considering Resolution Under its Consent Regulations Framework.