The Securities and Exchange Board of India (Sebi) is planning to reduce the IPO allotment period to five working days from the present 15 days and is hopeful of doing that in a year’s time, according to its chairman CB Bhave. “The cut in timeframe for allotment is a systemic change and we need to see how it progresses. Our ultimate aim is to reduce the timeframe to five working days. We would like it to happen as soon as possible. But, we also have to deal with the fact that the whole system has to change, Bhave told reporters during the sidelines of an event hosted by the Institute of Insurance and Risk Management (IIRM).
He added that Sebi is also minimising disclosure norms for fast processing of the rights issue. As per clause 8.19 of the Sebi DIP guidelines, currently, companies should finalise the basis of allotment within 15 days and utilise the rights issue proceeds only after the allotment is finalised.
“The main difficulty in reducing the period between the end of an issue and the day of listing is the fact that we have to handle a lot of physical applications. Along with these, physical cheques have to be cleared in the systems. So, it is our hope that as the ASBA (Application Supported by Blocked Amount) process becomes more popular, this processing will get reduced, and then we will be able to reduce the time line,” he said. As far as the ASBA process was concerned, Sebi has received some encouraging response in the recent NHPC issue where about 1,50,000 applications came through ASBA.
The regulator at present was looking at the proposed interest rates futures market. “An RBI and Sebi committee has worked on it and has called for applications from the stock exchanges which are in a fairly advanced state of preparation. We should see some results in the next couple of months,” he said. A joint technical committee of the Reserve Bank of India and SEBI had, in June, recommended allowing interest rate derivatives based on 10-year government bond yields. National Stock Exchange and MCX-SX are currently working on the modalities of launching rate futures.
On the common online platform for mutual fund transactions, Bhave said: “AMFI has told us they have more or less frozen the design they want. They will now look at competitive vendors to decide on what kind of platform needs to be set up.”
He added that Sebi is also minimising disclosure norms for fast processing of the rights issue. As per clause 8.19 of the Sebi DIP guidelines, currently, companies should finalise the basis of allotment within 15 days and utilise the rights issue proceeds only after the allotment is finalised.
“The main difficulty in reducing the period between the end of an issue and the day of listing is the fact that we have to handle a lot of physical applications. Along with these, physical cheques have to be cleared in the systems. So, it is our hope that as the ASBA (Application Supported by Blocked Amount) process becomes more popular, this processing will get reduced, and then we will be able to reduce the time line,” he said. As far as the ASBA process was concerned, Sebi has received some encouraging response in the recent NHPC issue where about 1,50,000 applications came through ASBA.
The regulator at present was looking at the proposed interest rates futures market. “An RBI and Sebi committee has worked on it and has called for applications from the stock exchanges which are in a fairly advanced state of preparation. We should see some results in the next couple of months,” he said. A joint technical committee of the Reserve Bank of India and SEBI had, in June, recommended allowing interest rate derivatives based on 10-year government bond yields. National Stock Exchange and MCX-SX are currently working on the modalities of launching rate futures.
On the common online platform for mutual fund transactions, Bhave said: “AMFI has told us they have more or less frozen the design they want. They will now look at competitive vendors to decide on what kind of platform needs to be set up.”
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