Capital market regulator SEBI is set to bring out new de-listing regulations next month to enable smooth exit of companies from the bourses.
Inaugurating FICCI’s annual capital market conference in Mumbai on Wednesday, U K Sinha, Chairman – SEBI, felt that things of the past which have outlived their utility should have an exit opportunity.
Referring to companies that were hardly traded on the bourses, Sinha said “they should be de-listed in an honourable and fair manner keeping in mind the interest of the investors.”
SEBI also has plans to implement the electronic IPO (e-IPO) through a mechanism akin to the secondary market with target of listing a company, five days (T+5) after the issue has closed. This would subsequently be brought down to three days (T+3) according to Sinha. As on date, companies list 12 days (T+12) after an issue has closed for subscription.
Also on the anvil is the introduction of listing regulations replacing the current listing agreement (of exchanges) that listed companies have to comply, as a regulation is legally more binding than an agreement.
Insider trading regulations
SEBI is also expected to unveil the latest version of insider trading regulations shortly following the recommendations of the N K Sodhi committee on insider trading.
SEBI was in favour of a soft enforcement regime coupled with risk-based supervision with all these measures coming in before the end of this fiscal, said Sinha.
In addition, SEBI is also looking at allowing raising of fresh capital through the institutional trading platform. At present, companies (SMEs) are allowed only to do an offer-for-sale of existing equity on an institutional trading platform without the requirement of an IPO.
Corporate bond market
On measures to deepen the corporate bond market, Sinha said that RBI and SEBI were working together to implement T+2 settlement of corporate bonds instead of T+1.
Settlement occurs when securities are credited into the demat account of the buyer and money into the bank account of the seller on the designated date or the second working day after the trade has been done (T+2 in this case) .