Chennai: SEBI on Tuesday said the reduced 60-day timeline for allotment of shares in rights issues would be introduced from the last week of September.
To make the rights issue process more efficient, SEBI is also examining the possibilities of introducing a system where corporates will be required to send rights issue entitlement in the demat form. “This may be introduced in the next two to three months,” said Mr C.B. Bhave, Chairman, SEBI.
Addressing the audience on Issues of the Indian Capital Market and its Evolution in the Future at the FICCI’s National Executive Committee Meeting held here on Tuesday, he also said the current practice of quarterly financial reporting by listed companies will continue to stay as part of transparent and best corporate practices.
Responding to a suggestion from the audience that half-yearly results would be better as quarterly results require top executives of the company to focus more on finalisation of accounts every three months, the SEBI Chairman said, “We have been continuing this practice for more than a decade now. We don’t see any reason to go back to the old system.”
Talking about the stock delisting norms, Mr Bhave said SEBI is in the final stage of bringing new regulations on delisting. As far as the delisting norms are concerned, “we are at a fairly advanced stage. The deregulations of SEBI can be issued along with the delisting rules that the Government is required to notify. We are in constant touch with the Government and we will issue the rules and regulations simultaneously,” he said.
With increasing exposure to the world market, India Inc is being increasingly integrated with the rest of the world.
“To communicate and effectively engage with the world, we need a common language that is understood by every market in the world,” said Mr Bhave.
On primary market reforms, he said five more banks have expressed interest to comply with SEBI’s proposal to debit investors’ accounts only to the extent required and only when required. Pointing out that so far five banks — Corporation Bank, SBI, ICICI Bank, HDFC Bank, Union Bank — have agreed to that, he said this will prevent the investing community from waiting for refund warrants.
Asked whether SEBI has taken any action on companies that have not complied with the “independent directors” norm, he said notices have been issued against such companies. To another question on why stock lending and borrowing scheme, which was introduced along with “short-selling” in April this year, has not picked up, he said according to the feedback “we received from markets, the one-week window for that is too short a time; hence SEBI may consider extending the window”.
He also pointed out that a SEBI-RBI joint committee is working on a new framework to bring in a certain amount of predictability and transparency in M&A deals.
