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Exchanges are expected to provide indicative price and cumulative price/ bid quantity information at periodic intervals.
Price bands are not applicable for orders/bids placed in the offer for sale; stock specific ticket size (according to the extant practice in normal trading session) is also applicable for this window, said SEBI.
The offer for sale should be halted if the circuit filter for the scrip in the normal market is breached, said SEBI. Multiple orders from a single buyer are permitted but only limit orders/ bids are allowed. If the floor price is disclosed in advance, orders or bids below the floor price are unacceptable.
For all investor categories including institutions, exchanges have been directed to collect 100 per cent of the order value in cash upfront for every buy order or bid.
Margins
Sellers are expected to deposit the entire quantity of shares to be offered for sale with the clearing house of the designated stock exchange (DSE) before the offer opens. No other margin is required.
Mutual funds and insurance companies have been reserved 25 per cent of the offer and any unsubscribed portion would devolve on to other bidders.
Settlement
Settlement would be done on a trade to trade basis latest by T+2, T being the date of closure of offer, with allocations and obligations intimated to brokers latest by T+1.
Transactions cannot be netted at the broker's end and the clearing house of the DSE shall transfer the shares received as pay-in to the clearing house of the other stock exchange based on the settlement obligation.
Brokers are required to issue contract notes to the client based on the allotment price and quantity in terms of conditions specified by the exchange.
Sellers are allowed to withdraw the offer for sale prior to its proposed opening and another such offer for sale can be made again only after a 10 day cooling off period, said SEBI.
Offers cannot be cancelled during the bidding period and in the absence of sufficient demand at or above the floor price, the seller has a choice to either conclude the offer or cancel it in full.
>raghavendrarao.k@thehindu.co.in
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