Financial Daily from THE HINDU group of publications
Saturday, Oct 05, 2002
Financial Daily from THE HINDU group of publications Saturday, Oct 05, 2002 |
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Corporate
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Regulatory Bodies & Rulings Markets - Regulatory Bodies & Rulings SEBI notifies 3-yr lock-in for sweat equity shares Our Bureau
MUMBAI, Oct. 4 THE Securities and Exchange Board of India (SEBI) has notified new separate regulations specifying the procedure for holding enquiry and imposition of penalty in respect of all the intermediaries regulated by it. These regulations — (Procedure for Holding Enquiry by Enquiry officer and Imposing Penalty) Regulations, 2002 — would provide for expeditious completion of enquiry proceedings and also adhering to the Principles of Natural Justice, a SEBI statement said on Friday. It said these regulations provide for summary procedure for cases such as non-payment of fees by intermediaries, declaration of defaulter by stock exchanges in cases of brokers, declaration of insolvent by a competent court i.e. such cases where there is no need of holding an enquiry. The regulations provides for both minor and major penalties. With these regulations, the corresponding provisions in respect of procedures for holding enquiry and imposition of penalty as contained in the respective regulations for intermediaries have been deleted from the respective regulations. This regulation comes into effect from September 27, 2002. Meanwhile, SEBI has also notified new regulations for sweat equity under which the market regulator has prescribed a lock-in period of three years for the shares issued under sweat equity. Under the SEBI (Issue of sweat equity) Regulations 2002, pricing of sweat equity shares shall be as per the formula prescribed for preferential allotment. The valuation of the consideration provided in the form of intellectual property rights or know-how or other value-addition shall be carried out by a merchant banker, who shall also obtain a certificate of compliance with relevant accounting standards from an independent chartered accountant, the statement said. In addition, the value of sweat equity shares allotted shall be taken for the purposes of ceiling of managerial remuneration in certain circumstances, it said.
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