SEBI changes IPO rules, listing time halved to 3 days; check details

  • 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, said SEBI in a circular.

Livemint
Published9 Aug 2023, 06:53 PM IST
SEBI halves IPO listing time to 3 days. Photo: iStockphoto
SEBI halves IPO listing time to 3 days. Photo: iStockphoto

Capital markets regulator Securities and Exchange Board of India (SEBI) on August 9 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.

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, said SEBI in a circular on Wednesday.

According to the regulator, the reduction in timelines for listing and trading of shares will benefit both issuers and investors. Issuers will have faster access to the capital raised thereby enhancing the ease of doing business and the investors will have the opportunity for having early credit and liquidity for their investment.

“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 issue closing date,” said SEBI.

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, accordinfg to the regulator.

In instances of mismatch, such applications would continue to be considered invalid applications for finalising the basis of allotment.

At its board meeting in June, 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). It had said that the revised timeline of T+3 days will be made applicable in two phases. 

"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," SEBI had said at its board meeting.

SEBI had also 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. ‘’The issue around TER was discussed in depth. SEBI will publish a new consultation paper on TER regulations'', said Madhabi Puri Buch, SEBI Chairperson. The old draft TER proposal will undergo a significant change and new regulations will be published soon, according to SEBI.

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First Published:9 Aug 2023, 06:53 PM IST
HomeMarketsIPOSEBI changes IPO rules, listing time halved to 3 days; check details

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