In A Record Year For IPOs, SEBI Working To Shorten Listing Time
SEBI chief pushes for curbs on investment advisors.
Market regulator Securities and Exchange Board of India (SEBI) is working on shortening the gap between an initial public offer and the listing of shares to four days from six days currently, Chairman UK Sinha said on Thursday at the CII Summit on financial markets in Mumbai.
Sinha added that a suggestion to reduce this gap to three days may be difficult to implement at this stage.
Calling it his valedictory speech, Sinha said that the market regulator will announce a slew of new measures before his term ends in March 2017.
Primary Market Progress
Speaking about the health of the primary market, Sinha said the current year is expected to be a record one in terms of the number of IPOs launched.
Public Issue numbers have been increasing. in 2014-15, the number was less than Rs 3000 crore; in 2015-16, it was at Rs 15,000 crore. This year, till October 31, public issues of around Rs 22,500 crore have hit the market.UK Sinha, Chairman, SEBI
InvITs, REITs: Off To A Start
On the progress of infrastructure investment trusts (InvITs) and real estate investment trusts (REITs), Sinha confirmed that four out of the six InvIT applications have been approved while one REIT application is pending approval.
Deepening The Debt Market
The SEBI chairman pointed out that bondholders have benefitted hugely as a result of the Insolvency Act and amendments to the SARFAESI Act; under which debenture holders are now secured creditors.
The SEBI will work towards deepening the debt, cash and stock futures markets, Sinha said, inviting suggestions from industry. However, some issues are outside of SEBI's domain, he added.
There are tax issues that are affecting the cash and stock futures market. As far as the credit market is concerned, sectoral regulators are hesitant to allow institutions they regulate to invest in non-investment grade paper.UK Sinha, Chairman, SEBI
Corporate Governance Lessons
Sinha urged India Inc. and asset management companies (AMCs) who vote on resolutions to take note of developments around the world relating to compensation of CEOs.
There are several examples of board resolutions being defeated on excessive CEO compensation in Fortune 500 companies. I urge corporate India to take note of these.UK Sinha, Chairman, SEBI
He pointed out that 40 large AMCs in the U.K. have come together voluntarily to start a diversity project to look at issues of diversity in company boards and senior management, and said Indian companies should learn from these developments.
SEBI's Immediate Agenda
Sinha said that in the immediate future, regulating investment advisors, as also co-location and high frequency trading are top priorities for SEBI. The discussion papers on both issues are in the public domain.
Responding to criticism that SEBI’s discussion paper on investment advisors is a regulatory over-reach and curtails freedom of speech, Sinha said, “ SEBI is too small to influence this freedom. I have received messages advocating buying stocks. Do you expect SEBI to ignore such messages? Instead of criticising SEBI’s stand on investment advisors, give solutions.”
Tata-Mistry Tussle
Sinha declined to comment on specific company developments when asked for SEBI's views on the ongoing tussle between Tata Sons and Cyrus Mistry but said Independent directors have a fiduciary duty towards all shareholders, must take care of shareholder interest and follow SEBI and Companies Act requirements.