Sebi Slashes Listing Timeline For Shares After IPOs From December
The Securities and Exchange Board of India (SEBI), the regulatory authority for capital markets, announced on 9 August that it is cutting down the time it takes for shares to be listed on stock exchanges after the closure of Initial Public Offerings (IPOs). The current timeline of six days will be shortened to three days.
SEBI stated that this revised listing timeframe will be optional for all public offerings that begin on or after 1 September. However, it will become mandatory for all issues starting from 1 December. The decision aims to benefit both companies issuing shares and investors. Companies will gain quicker access to the raised capital, enhancing the ease of business. On the other hand, investors will experience earlier credit and liquidity for their investments.
SEBI explained that it intends to reduce the listing time for specific securities from the closure of a public offering to three working days (referred to as T+3 days), down from the current requirement of six working days (T+6 days), with 'T' indicating the issue's closing date.
In order to ensure the accuracy of applications, the Registrar to an Issue will conduct third-party verification. This verification will involve matching the PAN (Permanent Account Number) provided in the demat account with the PAN in the applicant's bank account.
SEBI had discussed this reduction in listing time during its board meeting in June, where it was approved. The transition to the new timeline will occur in two phases. The decision was made following extensive consultations with various stakeholders, including anchor investors, registrar and transfer agents, broker-distributors, and banks. Stress testing was conducted to ensure a smooth transition to the new timeline.
Additionally, SEBI decided to postpone its plans to regulate the total expense ratio (TER) charged by mutual fund houses. The proposal, which had been anticipated to bring significant changes, will be revisited and a new consultation paper on TER regulations will be published. The initial draft proposal will undergo substantial revisions, and the new regulations will be released in the near future.
