In a bid to cut down on the time taken for listing of shares via an Initial Public Offering, SEBI is in discussions with the Ministry of Corporate Affairs to make it mandatory for the Registrar of Companies (RoC) to approve or reject the prospectus filed by companies within a specific time period.

Currently, the RoC is not required to issue an approval or denial when a company files for listing of shares. But it can raise objections at a later stage, which the market regulator feels can delay the whole process. SEBI had recently announced that it wanted to reduce the time taken for the listing of shares from six days to three days after an IPO is concluded.

Amendment needed

As part of this plan, the market regulator wants the Ministry of Corporate Affairs to amend the Companies Act to ensure that the RoC also acts within the timeline, according to sources aware of the discussions. SEBI recently approved a proposal to introduce Unified Payments Interface (UPI) as an alternative payment option for retail investors buying IPO shares.

“The mode of payment will mainly bring down listing time, but if RoC raised an objection at a later date, the issue could get delayed leading to blockage of investor funds,” said a market participant.

RoC is an office under the MCA, and deals with the administration of companies and limited liability partnerships in India. It completes regulation and reporting of companies and their shareholders and directors, and also administers government reporting of several matters, including annual filing of numerous documents.

The registrar can also ask for supplementary information from a company, and has powers to search their premises and seize account books with prior court approval.