In a recent development, the Securities and Exchange Board of India (SEBI) halved the timeline for listing of shares on stock exchanges after the closure of Initial Public Offerings (IPOs) to three days from six days at present on Aug 9, 2023.
Changes In IPO Rules
Further, the Capital markets regulator said that the new listing timeframe will be voluntary for all public issues opening on or after September 1 and mandatory for all the issues which come after December 1, in its circular on Wednesday.
The reduction in timelines for listing and trading of shares will benefit both issuers and investors, the regulator noted.
With this implementation, the issuers will have faster access to the capital raised thereby enhancing the ease of doing business.
In addition to this the investors will have the opportunity for having early credit and liquidity for their investment.
According to SEBI, “It has been decided to reduce the time taken for listing of specified securities after the closure of public issue to three working days (T 3 days) as against the present requirement of 6 working days (T 6 days). ‘T’ being the issue’s closing date.”
Moving ahead, the Registrar to an Issue would undertake third-party verification of the applications by matching the PAN available in the demat account with the PAN available in the bank account of the applicant, SEBI said.
In case of the mismatch in PAN, such applications would continue to be considered invalid applications for finalizing the basis of allotment.
What About The Implementation?
Earlier, the SEBI board had approved the proposal for reducing the time period for listing of shares in a public Issue from the existing six days to three days, from the date of issue closure (T Day), at its board meeting in June.
Coming to implementation, the revised timeline of T+3 days will be made applicable in two phases, SEBI stated.
The market regulator noted, “The decision to reduce the timeline for listing follows extensive consultation with all stakeholders, including anchor investors, registrar and transfer agents, broker-distributors, banks, etc. Extensive stress testing has been done to confirm that the transition to T+3 would be smooth,” at its board meeting.
Besides this, SEBI had deferred the proposal to regulate the total expense ratio charged by mutual fund houses at its June meeting, which was widely anticipated to be overhauled.
