SEBI's Awkward Two-step On Recent Changes

The  Securities and Exchange Board of India (SEBI) recently introduced a series of changes to protect investors in listed issuance debt securities. The precursor to these changes was a little noticed amendment to the regulations on the issuance of listed non-convertible preference shares by banks for the purposes of regulatory capital. These instruments contain features such as the write-down of the principal. In the light of recent controversies relating to the impact of such features on retail investors, SEBI's changes allow only qualified institutional buyers to participate in the issue of such instruments. The minimum offer for such instruments must be ₹10 million (US$135,000).