This comes at a time when a huge controversy has broken out with flamboyant businessman Mallya leaving the country amid attempts being made by various lenders to recover their dues totalling over Rs 9,000 crore.

Some entities tend to tap equity and debt markets for funds after banks stop giving credit for wilfully defaulting on their existing loans, but small investors get trapped due to lack of information about their ‘defaulter’ status.

However, there is a counter-view that a complete fund- raising ban on wilful defaulters could come in the way of promoters of a listed company seeking to infuse fresh funds, which may hurt interest of minority shareholders.

Seeking to strike a balance, the regulator mulls putting curbs on IPOs and FPOs by such entities where funds are raised from the public.

However, they can be allowed to tap existing shareholders, including promoters by way of rights issue, private placement or preferential allotment, a senior official said.

An individual or a company is declared a wilful defaulter for deliberate non-payment of the dues despite adequate cash flow and good net worth and for siphoning off funds to the detriment of the defaulting unit. Another proposal seeks to bar a wilful defaulter from taking control of any other listed company.

Issues relating to algo trades and co-location services as also new products and new investor classes in commodities market are also on the agenda.

This will also be the first board meeting of Sebi after the government last month extended by another year the tenure of Chairman U K Sinha, who assumed charge on February 18, 2011.

Sebi is also keen on steps to tackle cross jurisdictional market manipulation for which it plans to pitch for greater co-operation between regulators.

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