New Listing, Delisting Regulations Next Month: Sebi

Mumbai: The Securities and Exchange Board of India (Sebi) on Wednesday said it will come out with new listing and delisting guidelines next month, revamping the existing listing agreements. The capital market regulator also made it clear that corporates would have to adhere to it.

 

"We are moving away from the existing listing agreement to listing regulations. The listing agreement is an agreement with companies and exchanges. Now, it will have a force of regulations... There will be a hierarchy of regulations and will have higher force, then an agreement," Sebi Chairman U K Sinha told reporters on the sidelines of a capital market summit organised by the industry lobby Ficci in Mumbai.

 

Mr Sinha also said Sebi was close to finalising new delisting guidelines and will release them next month.

 

"The whole idea is to tell corporate India that we are now more serious about these regulations being followed," he said.

 

The regulator, however, did not elaborate on the punitive measures.

 

Sebi had earlier this year released a discussion paper on revamping the delisting agreements and to come out with listing/delisting regulations, and had sought feedback on its proposals from various stakeholders.

 

"We are finalising new delisting guidelines as there are no trading in some stocks and promoters are finding difficult to delist the shares. We will announce guidelines under which delisting can happen in a fair way with investors' protection," he said.

 

Mr Sinha also pointed out that the committee on review of insider-trading norms has submitted its report. The regulator is examining these recommendations before coming out with new norms in the current financial year itself.

 

Commenting on disclosure norms, Mr Sinha said Sebi has mandated bourses that they have to inform the regulator of any violation by corporates.

 

"Earlier, it was a routine activity, but now we are getting regular reports. We have asked exchanges to increase the manpower, which they are doing now. We are also inspecting the exchanges on what action they are doing for violation of disclosure norms," he added.

 

Sebi is working with the Reserve Bank of India (RBI) and the government for raising FII (foreign institutional investor) participation in government bonds and enhancing settlement pattern from T1 to T2.

 

On the recently notified guidelines for real estate investment trusts (REITs), Mr Sinha said the regulator was in talks with the government to provide greater clarity on taxation norms applicable to these instruments and was hopeful the government will be willing to consider the same.

 

It is also considering electronic IPO (E-IPO) option in the current financial year, which will be based on T3 or T5 form, Mr Sinha said adding the fund raising activities have turned positive as more enquiries have been received for raising funds in September.

 

The regulator is also working on a plan to allow small companies to use institutional trading platform (ITP) on stock exchanges to raise fresh capital.

 

At present, the ITP is used by SMEs and start-ups to list their shares without an initial public offering (IPO).

 

"We are going to make further changes in the SME platform to help more companies to raise money,"  Mr Sinha added.

 

Speaking on the broader market environment, he said, "Our growth numbers are remarkable. In the past one year alone, the markets returned about 30 per cent."