To curb grey market activity, SEBI is working on launching “when-listed” platform

“We are actively considering “when-listed” trading. Today, we are astatine T+3 (trading positive 3 moving days) from the closure of the contented to listing but adjacent successful those 3 days determination is simply a batch of (grey market). So, we consciousness that if investors privation to bash that (grey marketplace trading), wherefore not springiness them an accidental (to trade) successful a due regulated way?” Buch said astatine the 13th AIBI yearly convention.

At present, erstwhile the IPO is closed, shares person to beryllium listed connected bourses successful trading positive 3 moving days (T+3), with T being the closing time of the offer. The allotment of shares is done connected T+1 day.

She further explained that aft the allotment of shares successful an IPO, investors person a close to merchantability those shares. In the play betwixt the allotment of shares and listing day, investors commercialized successful the grey marketplace – an unorganized risky market.

Grey marketplace refers to an unofficial trading of securities adjacent earlier they are listed connected a banal exchange. This is an unregulated marketplace and works connected request and supply. Many investors look astatine the premium offered successful the grey marketplace for banal of a institution which has launched an IPO, earlier considering investing successful the offer.

“The thought is that immoderate the grey marketplace is going connected close present successful the pre-listing period, we deliberation that’s not suitable. If you got your allotment (of shares successful IPO) and you privation to merchantability it, merchantability it successful the organized market,” Buch said.

According to marketplace participants, by launching the “when-listed” platform, SEBI wants to guarantee immoderate magnitude of pre-IPO enactment to happen, but successful a ineligible manner.

The SEBI chairperson further said that the regulator is moving connected demystifying the IPO document.

“We are astatine a precise precocious signifier wherever determination volition beryllium a modular template for an IPO. You simply capable it up and it makes your job, arsenic a merchant banker and an issuer, overmuch easier. Anything which doesn’t acceptable into that mean template, determination is simply a proviso for exceptional reporting,” she said.

With this, the IPO papers tin beryllium work and seen into 2 parts – modular and exceptional. The caller demystified IPO process volition trim the clip for merchant bankers to hole the IPO papers and for SEBI to process the application, Buch added.