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Expert panel examining feasibility to introduce SPACs in India: SEBI chief

SEBI chief Ajay Tyagi on Wednesday said an expert committee is examining the feasibility of introducing special purpose acquisition companies (SPACs) like structures in India.

The group — formed under SEBI’s Primary Market Advisory Committee (PMAC) — is yet to submit its report, Tyagi said at FICCI’s annual Capital Market Conference.

SPACs or blank cheque companies are formed to raise capital in an initial public offering (IPO) to use the proceeds to identify and merge with a target company.

SPACs are usually formed by private equity funds or financial institutions, with expertise in a particular industry or business sector, with investment for initial working capital and issue related expenses. Such companies have recently become popular in the US.

Tyagi also said mandatory disclosures by listed companies must not be treated as checkboxes.

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He added that disclosures by many companies are lacking in some areas.

“On periodic disclosures such as annual reports, while all the fields are filled in, in many cases, they appear more like a check-box exercise. This is not acceptable,” Tyagi said.

He said that documents as important as the financial results, annual reports, corporate governance reports, and others need the level of quality the investors deserve.

The SEBI chief added that the regulator, in consultation with stock exchanges, is looking into free float.

In another development, SEBI on Monday asked RTAs to implement system interoperability among themselves for making it convenient for investors to transact and avail services while investing in mutual funds.

The platform will, in phases, enable a user-friendly interface for investors for the execution of mutual fund transactions, initiation and tracking of service requests, queries, and complaints, access investment related reports, transactions reports, capital gains or loss reports, details of unclaimed dividend, and redemption, among others.

The regulator has asked asset management companies (AMCs) and depositories to facilitate the registrar and share transfer agents (RTAs) for the development of the proposed platform.

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