SEBI Approves Major Capital Market Reforms
Why focus: GS3 Economy — revised Angel Fund limits and Social Stock Exchange norms are classic numeric traps for Prelims finance MCQs.
In News
What Happened
Why It Matters
Background
History & Context
What Changed
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Offer For Sale (OFS) Eligibility: BEFORE, equity shares arising from the conversion of Compulsorily Convertible Securities (CCS) were not eligible for the OFS one-year holding period exemption. NOW, they are eligible, allowing early investors to exit more easily during an IPO.
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Founder ESOPs: BEFORE, founders classified as promoters had to forfeit their Employee Stock Ownership Plans (ESOPs) before filing the Draft Red Herring Prospectus (DRHP). NOW, they can retain and exercise ESOPs if they were granted at least one year prior to the filing.
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Angel Funds: BEFORE, the minimum investment limit for angel investors was higher (₹25 lakh). NOW, Accredited Investors can participate in Angel Funds with a significantly reduced minimum investment limit of ₹10 lakh.
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Social Stock Exchange (SSE): BEFORE, eligibility criteria were narrow and restrictive. NOW, the framework has been broadened to include a wider range of Non-Profit Organizations (NPOs), such as registered trusts and societies, making the platform more inclusive.
Prelims Angle
NCERT Connection
Practice Questions
Q1
Correct Statement(s)With reference to the SEBI capital market reforms approved at its 210th board meeting, consider the following statements: 1. Equity shares arising from the conversion of Compulsorily Convertible Securities (CCS) are now eligible for Offer for Sale (OFS) exemptions. 2. The minimum investment limit for Angel Funds has been increased to ₹50 lakh to limit risk exposure. Which of the statements given above is/are correct?