In a significant move aimed at streamlining the Initial Public Offering (IPO) process and bolstering the ease of doing business in India's capital markets, the Securities and Exchange Board of India (SEBI) has announced a reduction in the timeline for listing shares on stock exchanges following the closure of IPOs.The regulatory body has cut the listing timeframe from the current T+6 (where...
In a significant move aimed at streamlining the Initial Public Offering (IPO) process and bolstering the ease of doing business in India's capital markets, the Securities and Exchange Board of India (SEBI) has announced a reduction in the timeline for listing shares on stock exchanges following the closure of IPOs.
The regulatory body has cut the listing timeframe from the current T+6 (where 'T' signifies the days of the closure of the issue) to T+3 days, a decision that is expected to have far-reaching implications for market participants.
The SEBI circular, issued on Wednesday, highlights that the revised listing timeline will be voluntary for all IPOs that commence trading on or after September 1. Subsequently, this shortened timeline will become mandatory for all issues launched after December 1, 2023.
Explaining the rationale behind the move, SEBI stated, "It has been decided to reduce the time taken for listing of specified securities after the closure of a public issue to three working days (T+3 days) as against the present requirement of 6 working days (T+6 days). 'T' represents the issue closing date."
An integral aspect of this reform is the role of the Registrar to an Issue, who will now undertake third-party verification of applications by matching the Permanent Account Number (PAN) available in the demat account with the PAN linked to the applicant's bank account. In cases of a mismatch, such applications will be deemed invalid for finalizing the basis of allotment.
The streamlined process is poised to offer issuers quicker access to the raised capital, thereby fostering a more efficient business environment. Concurrently, investors will benefit from accelerated credit and liquidity for their investments, enhancing overall market liquidity.
The circular also introduces pivotal modifications to various activities linked to the public issue process. It underlines the significance of disclosing the T+3 listing timeline in the Offer Documents of public issues. Moreover, SEBI has restructured the compensation calculation for investors encountering delays in unblocking Application Supported by Blocked Amount (ASBA) application funds, with the calculation now commencing from T+3 days.
To ensure rigorous verification of PAN details, the circular introduces directives for both Direct Bank ASBA and Syndicate ASBA applications. The Registrar to an Issue is mandated to cross-reference PAN information between the demat account and the corresponding bank account.
Circular No.: SEBI/HO/CFD/TPD1/CIR/P/2023/140
Date: 09.08.2023