SEBI seeks to reduce time lag in IPO issues
18 November 2009
The Securities and Exchange Board of India (SEBI) proposes to bring down the time taken for processing of applications for initial public offers (IPO) to just seven days by the next year. Currently, an IPO issue takes an average 20 days for application processing.
C B Bhave, chairman of the market regulator, said the timely settlement of transactions is necessary to reduce the cost of mutual funds and the risk of investors.
"We need to look at reducing the cost of mutual funds and risk of investors," Bhave said at a conference.
"The primary market is still somewhat inefficient compared to the secondary market," Bhave said.
Meanwhile, on Tuesday, the market regulator nullified two quasi-judicial orders of one of its own benches. The orders, if implemented, would have seriously embarrassed its chairman C B Bhave for his accountability in his earlier assignment as head of the National Securities Depository Ltd (NSDL).
Had the two orders passed on 4 December 2007 been spared, it would have implicated the SEBI also for regulatory failure in the 2005 IPO scam, in which tens of thousands of fake demat accounts had been opened to corner the shares reserved for small investors.