MUMBAI: In a significant move, the Securities and Exchange Board of India (SEBI) on Wednesday accepted several recommendations made by the Uday Kotak-led committee on corporate governance. Some of them include revising the framework for listing regulations, allowing traders to share co-location facilities and reducing the maximum number of board directors besides others.
In its board meeting here, the market regulator decided to introduce shared co-location services to reduce cost for trading members operating from the co-location facility, while bourses will provide tick-by-tick data feed.“This will reduce cost of brokers and address concerns of unfair access,” said Ajay Tyagi, chairman, SEBI.
It may be noted that earlier, SEBI observed that algorithmic traders intentionally clogged the systems with a large number of orders and proposed to review, to disincentive it. Algo trading refers to orders generated at faster speeds using mathematical models to execute trade automatically.
Meanwhile, SEBI decided to revise existing enforcement framework for non-compliance of listing regulations by companies, including composition of board and its committees, submission of financial reports etc.
It also empowered exchanges to freeze shareholding promoter and promoter group in the non-compliant entity and their shareholding in other entities. The maximum number of board directors of listed entities will be down to eight from ten by April 1, 2019 and to seven by April 1, 2020, besides enhancing the role of audit, nomination and remuneration, and risk management committees.
Recommendations of the committee
The 25-member Kotak Panel, which was set up in June 2017, had recommended improvements in transparency, keeping large shareholders informed about unpublished information among others.