Mumbai: The Securities and Exchange Board of India (Sebi) has planned a comprehensive review of rules governing IPOs by small and medium companies, its chief, Tuhin Kanta Pandey, said Wednesday. Separately, he said the new system for determining the closing prices of most frequently traded securities detects manipulation much faster than was possible with the earlier mechanism. "Issues such as market making were adding to the cost for small-company IPOs," Sebi chairman said at an industry event.
The underwriting system is another area that needs attention, he said, adding that it is not working effectively and companies are having to bear significant costs.
A working group formed by Sebi to examine issues related to the SME platform has recently submitted its report to the regulator. Sebi will be coming out with a consultation paper soon on the SME platform. "If someone is on the SME platform, obviously we do not want them to incur higher costs. But the cost is significantly higher compared with the mainboard," Pandey said.
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He added that increasing the trading lot size and application size to control retail participation has not achieved the intended purpose. Sebi is also looking to support global fund management activity from India. The changes to the portfolio management services regulation would enable trading from onshore, Pandey said.
