The Hindu Business Line : SEBI board to review primary market issuance process

Thrust on efficiency: The SEBI Chairman, Mr C.B. Bhave, addressing a press conference along with board member Dr T.C.Nair, in the Capital on Wednesday.

Our Bureau

New Delhi, March 5 In a move aimed at reducing the gap between the opening date of an issue and the listing of shares, the Securities and Exchange Board of India on Wednesday decided to review the entire gamut of primary market issuance process other than the aspect of pricing of shares.

“There is a feeling among market participants that a reform similar to the secondary market side, where settlement is now T+2, has not happened on the primary market side. Therefore, the board decided to examine all issues and on how the whole process can be made more efficient through a shorter time gap,” Mr C.B. Bhave, SEBI Chairman, told a press conference after a board meeting of SEBI here today.

He, however, clarified that the scope of this decision does not include the review of the mechanism for pricing of initial public offers (IPOs). “This decision is aimed at making the process more efficient,” Mr Bhave said. Indications are that the SEBI board may finally veer around a decision to reduce the gap to a week or less than a week from the current level of about 21 working days.

Fee structure

The SEBI board also decided to rationalise its fee structure so as to directly or indirectly benefit common investors. The registration fee for venture capital funds has been reduced from Rs 10 lakh to Rs 5 lakh. Also, the ad-valorem fees for filing of offer documents for mutual funds, public issues, right issues, takeovers, buy back of shares have been reduced.

Dr T.C. Nair, a whole-time Member of SEBI, said that the capital market regulator would soon notify the FII registration procedure, which is expected to be more liberal than the one envisaged in late October last year after the P-Note issue was handled.

“We want to make it more flexible and that is why it has not been notified as yet. It is ready and we will soon notify it. We want to make it more flexible so that more and more FIIs can easily get registered,” Dr Nair said.

Between October 15, 2007 and now, 200 FIIs have registered and double the number of sub-accounts have also got registered, indicating that the policy is in place and more FIIs are coming to India through the front door rather than the P-Note route.

Meanwhile, Mr Bhave said that the Finance Minister, Mr P. Chidambaram, addressed the members of the SEBI board today.

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