Business Daily from THE HINDU group of publications
Wednesday, May 14, 2008
ePaper | Mobile/PDA Version | Audio
Business Daily from THE HINDU group of publications Wednesday, May 14, 2008 ePaper | Mobile/PDA Version | Audio |
|
|
|
|
|
|
|
|
Home Page
-
IPOs Markets - Investor Protection Our Bureau
Mumbai, May 13 Investors no longer have to wait for weeks for refund of their IPO application money. The application money earmarked for an IPO will now remain in the applicant’s bank account till the allotment is finalised, thus eliminating the refund process, SEBI said on Tuesday, addressing a long-standing grouse among investors, particularly in the retail segment. “The modalities in this regard would be worked out separately,” said a news release from SEBI, issued after its Board met on Tuesday. “The Board approved, in principle, the concept of making lien on bank account as an alternative mode of payment in public/rights issues.” This means that the money marked for the IPO will not be used for any other payment obligation during that period. At the same time, the applicant will enjoy the interest payable on the amount. This would also reduce the burden on registrars and merchant bankers. But bankers to the issue can no longer enjoy the floating interest, said officials associated with the IPO process. Most important of all, investors would not have to wait for their refund money. It also ensures that a liquidity crisis such as that of January 2008 does not occur again. At that time, many investors were unable to buy scrips which were at attractive lows, as their money was locked up in the Reliance Power and the Future Capital IPOs. Nor could they meet their margin money requirements. PMs – NO POOLINGThe SEBI Board also decided to disallow the pooling of investors’ money by portfolio managers. “Portfolio managers should not float a scheme or pool the resources of the client in a way which is akin to mutual fund activity,” said SEBI. They have been allowed six months’ time to convert their operations managed on pooled basis to individual basis. The Board also decided to enhance the minimum net worth requirement for registration of portfolio managers from the existing Rs 50 lakh to Rs 2 crore in a phased manner. New IPO application forms to avoid manual intervention Amount can be in investors’ account till IPO allotment: SEBI More Stories on : IPOs | Investor Protection | Regulatory Bodies & Rulings
Article E-Mail :: Comment :: Syndication :: Printer Friendly Page
|
Stories in this Section |
 |
|
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription Group Sites: The Hindu | The Hindu ePaper | Business Line | Business Line ePaper | Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |
Copyright © 2008, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line
|
