Sebi Relaxes Norms For Government For PSU Disinvestment As per reports, to give this effect, the regulator has amended listing obligations and disclosure requirements (LODR) norms
By Teena Jose
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Securities and Exchange Board of India (Sebi) released a notification on Tuesday stating that the capital market regulator can relax regulatory norms for the central government in relation to strategic disinvestment of public sector undertakings (PSUs). As per reports, to give this effect, the regulator has amended listing obligations and disclosure requirements (LODR) norms.
"The Board (Sebi) may after due consideration of the interest of the investors and the securities market and for the development of the securities market, relax the strict enforcement of any of the requirements of these regulations if an application is made by the central government in relation to its strategic disinvestment in a listed entity," stated the Sebi notification.
Literally, disinvestment is when governments or organizations sell or liquidate assets or subsidiaries fully or partially, or list it on the stock market.
As per earlier reports, in September, the Sebi had decided to dispense with a requirement for calculating open offer price with respect to the disinvestment of PSUs.
The board of Sebi approved amending the acquisition regulations in the context of strategic disinvestment of PSUs and consideration payable under open offer. As part of its corporate takeover regulations, the market regulator had recently set up three separate committees to reform the capital market and the ease of doing business.
"The market price of the PSU company undergoing strategic investment becomes susceptible to periodic disclosures. Considering the unique nature of transaction and process involved in a PSU disinvestment spanning over a long period, such a requirement of determination of open offer price under the takeover regulations many a time acts as an impediment in fructifying such strategic disinvestment of PSUs," notified Sebi.
