SEBI Proposes Tripling Fees For Informal Guidance, Expanding Eligibility To Include More Market Entities
Rajesh Kumar
1 Sep 2024 1:45 PM GMT
The Securities and Exchange Board of India (SEBI) has proposed amendments to the existing Informal Guidance (IG) Scheme, 2003. This scheme, originally introduced in June 2003 and amended in 2004 and 2023, allows registered entities to seek SEBI's guidance on specific transactions and interpretations of securities laws.
The IG Scheme was introduced by SEBI to provide clarity to market participants on complex regulatory issues. Initially, it catered to a limited group, including listed companies and SEBI-registered intermediaries. Over time, the scope expanded to include entities such as companies planning to list securities and mutual fund trustees.
SEBI has proposed expanding the list of entities eligible to seek informal guidance. Currently, the scheme is limited to listed companies, SEBI-registered intermediaries, and a few other categories. The proposed changes will include Market Infrastructure Institutions (MIIs) such as stock exchanges, clearing corporations, and depositories. Additionally, managers and trustees of pooled investment vehicles like Alternative Investment Funds (AIFs), Real Estate Investment Trusts (REITs), and Infrastructure Investment Trusts (InvITs) will also be eligible.
SEBI has also proposed a substantial increase in the fees associated with seeking informal guidance. The current fee of ₹25,000, which has remained unchanged for nearly two decades, is proposed to be raised to ₹75,000. Additionally, the processing fee, deducted in case of application rejection, will be increased from ₹5,000 to ₹15,000.
A structural change proposed in the consultation paper by the SEBI is the establishment of a centralized nodal coordination cell within SEBI. Currently, applicants must approach the relevant SEBI department for guidance, which can be cumbersome, especially when the applicant is unsure which department to contact. The new central node will serve as a single point of contact for all informal guidance requests.
SEBI has proposed that all communications between the applicant and SEBI should be conducted through electronic means, specifically via email. Applicants will be given up to 15 days to respond to SEBI's queries and failure to do so within this timeframe may result in the rejection of their application. The time taken by applicants to respond will not be counted within the overall 60-day processing timeline.
