The Hindu Business Line : SEBI panel proposes simplification of IPO forms

THE Securities Market Infrastructure Leveraging Expert (SMILE) task force will simplify the application process for initial public offerings, while banks may be authorised to make payments on behalf of applicants.

The first signs of the changes that SMILE may bring about have come courtesy Mr Nimesh Kampani, Chairman of JM Morgan Stanley, who has been close to the developments. Investors may well expect the regulator to accept the task force's suggestions on shorter, easier IPO applications, which will form a key part of the reforms that are eventually recommended, he added.

The task force came about in the wake of a major IPO - ONGC's - that saw serious mistakes committed with regard to the allotment of shares. In particular, there were multiple cases of investors not getting refunds after their applications were rejected. The issue stayed alive long after the IPO process was completed.

A number of IPOs, however, have been launched since then, without any such slip-ups.

SMILE will be able to add value to some of SEBI's earlier efforts on reforms, including the creation of a central database for market participants and investors (MAPIN), Mr Kampani mentioned. The task force is expected to deal with various segments of the market, including derivatives and funds.

Additionally, it is meant to cover all sorts of participants, a mandate that will lead it to registrars and depositories, among others. The regulator has also sought to get the experts' opinion on possible best practices with regard to market infrastructure and transaction processing, it is pointed out.

SMILE was set up under the leadership of Dr P.J. Nayak, head of UTI Bank. It met first in May. The task force, as the regulator had stated at the time of its establishment, will be required to do a "thorough health check" of the country's securities market.

In this context, it was proposed that there would be meetings with representatives of intermediaries and investors.

SEBI also invited members of the public to make suggestions that the task force could take up during the course of its deliberations.

SMILE has representations from a range of participants, including those engaged by exchanges and investment banks. Mutual funds, clearing houses and IT companies are also represented.

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SEBI panel proposes simplification of IPO forms