Discussion on REITs and New Corporate Control Code to be Held by SEBI

A source said today that the Securities and Exchange Board of India (SEBI), a capital market regulator will held a discussion about the new codes for corporate control for listed companies and new procedures for the Real Estate Investment Trusts (REITs) for lucrative market.

As proposed by Justice N K Sodhi, the board will also probably discuss about the trading standards for the new insiders and will also discourse about the allowing of REITs in India market in order to attract more investments into the capital market. Earlier this year, SEBI has invited public to leave their feedbacks and comments for drafting trading standards for corporate control along with the associated provision in the new Companies Act of 2013 and after that the regulator would approach the board for approval of the new code.

These above mentioned suggestions are likely to be discussed during the meeting held by SEBI on Tuesday 24th of December 2013 in Mumbai.

The discussion paper regarding the corporate governance code was drifted in January and the draft standards also pursue to contribute for bigger error by small shareholders and autonomous directors and check for any untenable payments to associated parties.

Along with the general inspection done by SEBI and stock exchanges, the board also has suggested to introduce a new idea of “Corporate Governance Rating” by autonomous agencies to check the level of agreement by the listed companies. The discussion paper also comprised about the larger alliance of the CEO salaries with the performance and objectives of the company and also should compulsorily reveal the ratio of the compensation paid to individual directors and their mid-staff salary. Alike, ideas have been also introduced in the new Companies Act.

The discussion paper also included that the compensation paid to CEOs in some Indian Companies is higher than the compensation received by their foreign equivalents and there is no evidence to justify this.

The new norms for insider trading was also in discussion paper. Before, setting the final regulations for the draft, the regulator has invited public comments, which will be opened till December 31st.

The new norms on insider trading also says that public servants and persons holding legal positions would be proscribed from trading in listed securities of companies as they handle their information, hence it will allow them to access to non-public price sensitive data.

These standards have been suggested in the month of March of 2013, by a board of members made by SEBI under the chairmanship of Justice N K Sodhi. 

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