Cracking the whip on wilful defaulters, the watchdog has decided to impose restrictions on them in terms of raising funds from the capital market.

Curbs would be put in place on companies, promoters, and directors that are categorised as a 'wilful defaulter' from accessing the capital market.

Currently, Sebi norms bar wilful defaulters from issuing convertible debt instruments. However, there is no restriction on such entities from raising funds from the capital market by way of public or rights issues, among others.

Sebi also said that mutual fund companies, which are yet to comply with the requirement of minimum Rs 50 crore networth, can only launch a maximum of two schemes annually till the time they meet norms.

However, such permission would be considered on a case to case basis, depending on such fund houses demonstrating that serious efforts are being made by them to meet the networth requirements within the prescribed timelines.

The regulator hiked the minimum net worth requirement for mutual funds to Rs 50 crore from Rs 10 crore in a move to weed out non-serious players and to ensure stability of the financial system. They have been given three years to comply with regulations.

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