India's markets regulator on Wednesday decided to tweak rules governing its 39.46 trillion rupees ($480.52 billion) mutual fund industry, allowing private equity firms to back Asset Management Companies (AMCs).
The Securities and Exchange Board of India (SEBI) said a private equity firm or its manager should have at least five years of experience managing funds and investing in the financial sector, and should have managed committed and drawn-down capital of not less than 50 billion rupees on the date of application.
Currently India only allows financial services firms and corporates to back an AMC.
SEBI also prescribed more disclosures around environment, social and governance (ESG) issues.
More reforms
The board of India's markets regulator on Wednesday approved a set of far-reaching changes aimed at giving more power to shareholders and creditors, including doing away with the current practice of having permanent board members for publicly listed companies.
The Securities and Exchange Board of India (SEBI) said in a statement board seats would come up for voting every five years, making shareholder approval mandatory for any director.
In a discussion paper released in February, the SEBI had said the new rules would kick-in from April 24. It did not, on Wednesday, give fresh details on when the changes would be implemented.
The regulator also said that any special rights granted to a shareholder of a listed entity will need to come up for periodic shareholder approval, and cleared a proposal which will give bondholders a right to object to related party transactions proposed by companies which have listed high-value debt securities.
Backstop fund for debt market
India's markets regulator has approved a fund to backstop the corporate debt market for buying ill-liquid and investment grade debt paper, it said on Wednesday.
In February, Reuters had reported that India is setting up a fund worth 330 billion rupees ($4 billion) to provide liquidity to its corporate debt market during bouts of stress, to help stem panic selling and ease redemption pressures.
Finance Minister Nirmala Sitharaman announced last year that the government had taken up the Securities and Exchange Board of India's proposal for the fund, without giving details.
