An approval process has two questions: who can decide, and what they may approve. Changing the first does not remove the second. That distinction is central to SEBI’s latest investment proposal.
Breakdown
The October 22 consultation excludes recognised clearing corporations. It covers specified related activities: SEBI-directed work, certain intra-group share transfers and operating subsidiaries investing only their own operating funds. Another route covers similar-function activities through companies regulated by another Indian financial regulator, where SEBI previously approved the activity and it remains unchanged.
Annual deployments under the automatic route across the institution and its subsidiaries would be aggregated, regardless of funding source. The cap: the lower of 5% of preceding financial-year-end net worth and regulatory minimum net worth. Net worth after deployment must remain at least 1.5 times that minimum.
Why this matters
Consider a hypothetical group that splits an investment between its parent and two subsidiaries. Three separate cheques do not necessarily create three separate allowances. A group-wide limit asks a different question: how much money is being committed altogether?
Governing-board approval, conflict checks, resource ring-fencing and half-yearly reporting would apply. Comments close November 12. This is a consultation, not operative relief.
The Crunch
For technology vendors and prospective partners, the practical question is whether a particular project meets the eligibility conditions—not whether its description sounds innovative. The next milestone is the final framework. A proposal alone does not establish faster delivery, an approved investment or savings for customers.