Exchanges, depositories pitch E-IPO, faster clearances to SEBI chief Ajay Tyagi
Ajay Tyagi, chairman of the Securities and Exchanges Board of India, today met with the officials of national exchanges, depositaries and Clearing Corporation for the first time since taking over office.
Ajay Tyagi, chairman of the Securities and Exchanges Board of India, today met with the officials of national exchanges, depositories and Clearing Corporation for the first time since taking over office, sources told Moneycontrol.
Among the priorities of the new SEBI chief is to introduce new products in the capital market and international financial center.
“He (Tyagi) comes across as willing to listen and re-consider proposals which have been turned down earlier,” said a source present at the meeting.
Among the priorities of the new SEBI chief is to introduce new products in the capital market and international financial center.
“He (Tyagi) comes across as willing to listen and re-consider proposals which have been turned down earlier,” said a source present at the meeting.
The officials present raised concerns over delays in product approvals at the International Finance Center - a platform that caters to customers outside the economy's jurisdiction, the source said..
The center, created to attract more foreign investment, offers a variety of financial instruments including equities, commodities and currency.
The National Stock Exchange also raised concerns over delay in getting a license to trade on the IFC. NSE's contemporary BSE already has an IFC set-up in Gujarat.
"Tyagi assured that the issues would be resolved very soon,” the source told Moneycontrol.
Exchanges also put forth a proposal of an E-IPO format for the market. Here, allotment of the initial public offering (IPO) can be done within a day or two after the bidding process ends, just like it is done in an offer-for-sale (OFS) process.
“Exchanges have proposed E-IPO process, which saves time of listing and there is no need of keeping money in banks,” the source said.
The E-IPO process will remove the application supported by blocked amount (ASBA) format - which requires the applicant to block his/her application money in the bank account for subscribing to the IPO - and subsequently, reduce duration of listing securities.
The exchanges have also proposed a common messenger standard for communication purpose, which will help improve back-end work efficiencies. Currently, different formats exist for every exchange and depository.
According to the source, common messenger service will improve efficiency and cost. It will also bring exchanges and depositories under the same communication process.
Inter-portability of clearing corporation was also discussed in today's meeting. The exchanges want a Clearing Corporation-like platform to ease the process of commodity exchange.
The exchanges also put in a request to increase financial institution shareholding in stock exchanges to 25 percent from current level of 15 percent and individual holding to 10 percent from 5 percent.
The center, created to attract more foreign investment, offers a variety of financial instruments including equities, commodities and currency.
The National Stock Exchange also raised concerns over delay in getting a license to trade on the IFC. NSE's contemporary BSE already has an IFC set-up in Gujarat.
"Tyagi assured that the issues would be resolved very soon,” the source told Moneycontrol.
Exchanges also put forth a proposal of an E-IPO format for the market. Here, allotment of the initial public offering (IPO) can be done within a day or two after the bidding process ends, just like it is done in an offer-for-sale (OFS) process.
“Exchanges have proposed E-IPO process, which saves time of listing and there is no need of keeping money in banks,” the source said.
The E-IPO process will remove the application supported by blocked amount (ASBA) format - which requires the applicant to block his/her application money in the bank account for subscribing to the IPO - and subsequently, reduce duration of listing securities.
The exchanges have also proposed a common messenger standard for communication purpose, which will help improve back-end work efficiencies. Currently, different formats exist for every exchange and depository.
According to the source, common messenger service will improve efficiency and cost. It will also bring exchanges and depositories under the same communication process.
Inter-portability of clearing corporation was also discussed in today's meeting. The exchanges want a Clearing Corporation-like platform to ease the process of commodity exchange.
The exchanges also put in a request to increase financial institution shareholding in stock exchanges to 25 percent from current level of 15 percent and individual holding to 10 percent from 5 percent.
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