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Source: Livemint
What is the News?
Securities and Exchange Board of India(SEBI) has put out a consultation paper seeking comments on its superior voting rights(SR) framework.
What is the Superior Voting Rights(SR) Framework?
- The Securities and Exchange Board of India(SEBI) has introduced the Superior Voting Rights(SR) Framework in 2019.
- Aim of the framework: to allow the founders of technology startups to retain control of their companies after they started trading publicly.
- Need: Promoters or founders of tech companies who are instrumental in starting up a company often lose control of the firm when they dilute their stakes to raise multiple rounds of funding.
Why is this framework being reviewed?
- The framework is being reviewed to give more flexibility to the founders of technology startups when it comes to raising capital and taking their company public.
