Sebi to discuss corporate governance code, REITs in Dec 24 meet

Securities and Exchange Board of India (Sebi) is likely to discuss on Tuesday the Corporate Governance Code for listed companies and also new measures like real estate investment trusts (REITs) for the benefit of market.

The market regulator would seek board approval for the new code, which is being put in place after taking into account public comments to draft corporate governance norms released by Sebi earlier this year along with related provisions in the new Companies Act, 2013.

These proposals are expected to come up for discussion during the Sebi board meeting on Tuesday in Mumbai.

Sebi's board is also likely to discuss new insider trading norms suggested by Justice NK Sodhi and a proposal to allow REITs in India in a move to attract more investments into the capital market, sources said.

The discussion paper on Corporate Governance Code was floated in January and the draft norms also seek to grant greater oversight by minority shareholders and independent directors and check any unjustifiable payments to related parties.

It has also proposed to introduce a new concept of 'Corporate Governance Rating' by independent agencies to monitor the level of compliance by listed companies, in addition to regular inspection by Sebi and stock exchanges.

The discussion paper also talked about a greater alignment of CEO salaries with the performance and goals of the company and also a mandatory disclosure of ratio of remuneration paid to each of their directors and their median staff salary. Similar provisions have been made in the new Companies Act.

According to the paper "on average, the remuneration paid to CEOs in certain Indian companies are far higher than the remuneration received by their foreign counterparts and there is no justification available to that effect".

The regulator's board would discuss new norms on insider trading.

According to the new rules, public servants and persons holding statutory positions would be prohibited from trading in listed securities of companies whose matters are being handled by them, thus giving them access to non-public price sensitive information.

These norms have been proposed by a committee formed by Sebi under the chairmanship of Justice Sodhi in March this year.

However, Sebi has sought public comments till December 31 before putting in place final regulations in this regard.