Accreditation criteria put out for investors of listed startups; Vision Document gets boost from Modi 2.0

Capital market regulator Securities and Exchange Board of India (SEBI) has laid down a framework for the accreditation of investors backing startups listed on Innovators Growth Platform in a circular dated 22 May.

For individuals, the accreditation criteria include a minimum liquid net worth of Rs 5 crore and an annual gross income of Rs 50 lakh. For corporates, the body is required to have a net worth of over Rs 25 crore to invest in companies listed on the platform.

Stock exchanges and depositories will be responsible for verification and maintenance of the accreditation of investors’ data, said the circular. The accreditation remains valid for a period of three years unless the financial status of the investor changes and is no longer eligible, under which case the stock exchanges are required to inform the regulator.

In December, SEBI had eased norms for Indian startups to list on the platform. On 21 May, the regulator also came up with a discussion paper on allowing companies listed on the platform to trade under the regular category on the main board.

Startup Vision Document 2024 gets boost

The Startup Vision Document 2024 released in April, which proposes a Rs 1,000 crore fund for startups, got a leg-up with the Bharatiya Janata Party (BJP)-led coalition winning a big mandate in the general elections for a second term at the Centre.

The document has proposed tax incentives for Employee Stock Ownership Plans (ESOPs) and has set a target of setting up 50,000 new startups and 500 incubators and accelerators by 2024.

Telcos push for OTT regulation

Telecom players have pushed for applying the same rules, especially on lawful interception and data localisation, to over-the-top (OTT) apps that provide calling and messaging facilities, such as WhatsApp and Facebook, reports said.

While mobile phone operators and telcos cited the need for “same service, same fee”, some like Reliance Jio said that regulating the OTT apps was also critical from a security and data standpoint.

In November 2018, Telecom Regulatory Authority of India (TRAI) had launched a consultation paper to set up a regulatory framework for OTT apps . In their submissions to TRAI in January, Jio and Paytm were in favour of lawful interception of messages and calls, citing national-security concerns.

Separately, the Intermediaries Draft Amendment Rules deals with data security issues of technology companies, which collect user data, and localisation norms for the same. The likes of Facebook, WhatsApp and Skype are a part of this.

TRAI chairman RS Sharma assured that there will be no overlap with the intermediaries’ guidelines and the call to regulate OTTs will be taken within a month’s time.

Virtual testing grounds for fin-tech

The capital markets and insurance regulators have come up with plans for creating testing grounds for fin-tech startups. While SEBI is yet to develop the guidelines, the Insurance Regulatory and Development Authority of India (IRDAI) has introduced a draft for insurance technology and fintech companies, comments on which have to be submitted by May-end.

Entry into the SEBI sandbox will allow companies to access anonymised data related to depositories, exchanges, and mutual funds.