The Securities and Exchange Board of India on Tuesday relaxed norms for the entry of foreign investors and tightened buyback rules for company promoters.
It said companies which offer to buy back their own shares from public shareholders would have to mandatorily utilise 50 per cent of the amount earmarked for the buyback programme as against the existing 25 per cent.
The Sebi board accepted the recommendation of the K.M. Chandrasekhar Committee for uniform and simplified entry norms for all classes of overseas investors.
It has decided to merge existing FIIs, sub-accounts and qualified institutional investors into a new investor class to be termed foreign portfolio investors.
The requirement of prior direct registration with Sebi for transacting in the capital market has been done away with.
Instead, overseas investors can start investing in India once they are registered with designated depository participants authorised by Sebi.
On the buyback rules, the regulator said companies which fail to comply with the minimum buyback requirement would have to forfeit the amount. Companies coming out with buyback offers would have to deposit at least 25 per cent of the amount in an escrow account.