Working on instant settlement of stock market transactions: Sebi chief Madhabi Puri Buch

Sebi chairperson Madhabi Puri Buch on Monday said that the market regulator is working on instantaneous settlement of transactions done at the stock exchanges. The announcement was made during a press briefing by the Securities and Exchange Board of India (Sebi). Buch said the capital market regulator is working with stakeholders to improve the timelines on transaction settlement.

"The regulator has been working on upping the pace of new equity issuances, debt issuances, approvals for mutual fund schemes using technology and other interventions with the aim of helping capital formation in the economy. Such interventions have accrued in monetary benefits of Rs 3,500 crore for the investor community on an annual basis, Sebi chief Buch stated.

In addition, Sebi would consider permitting the delisting of companies via fixed price instead of the reverse book-building procedure. The regulator would issue a discussion paper on the subject by December.

In the reverse book-building process, for delisting a company from the stock exchanges, shareholders place offers for the price at which they are willing to sell securities back to the promoters or to large shareholders who can influence company policy. Then, a delisting price is computed on the basis of offers.

"Nobody should feel that once they get in, they cannot get out. Therefore, we introduced a framework for voluntary delist," Buch said.

She also mentioned that the market regulator has allowed confidential filing of initial public offering (IPO) draft papers. "They can do confidential filing, test the market and, only when they are confident that they want to go forward with the IPO, then the prospectus is made public," Buch said.

Buch also recalled that she talked about how Sebi is conscious of the fact that capital formation is the core reason why it exists. Everything else is important but peripheral to the key task of capital formation in the economy, she said.

The Sebi chief said: "Today we are all in a very fortunate place as a country, as market participants and market observers that India is in a wonderful position where we have a very strong and robust economy, which continues to grow despite global headwinds."

The GST (goods and services tax) collection number show that the economy is doing extremely well and the advance tax payments by corporates are also a forward-looking statement by corporates on their performances, she further said.

(With inputs from PTI)