SEBI may introduce regulated platform for pre-IPO companies: Tuhin Kanta Pandey

SEBI may introduce regulated platform for pre-IPO companies: Tuhin Kanta Pandey

SEBI may introduce a new regulated platform where investors can trade the unlisted shares of a company, said the market regulator's Chairman Tuhin Kanta Pandey on August 21. This initiative will likely replace the unofficial grey market for IPOs.

Speaking at FICCI's 22nd annual Capital Markets Conference in Mumbai, the SEBI chief said that the initiative will be on a pilot basis with companies being able to trade after making certain disclosures. He noted that pre-listing information is often not enough for investors to make an investment decision. This platform will likely eliminate the unnecessary processes and pain points that cause avoidable friction in fundraising, disclosures and investor onboarding, Pandey said.

The new platform will allow investors to trade unlisted shares of the company in a regulated manner during the three days between IPO allotment and listing, effectively replacing the unofficial grey market which currently operates during the period.

When asked whether there is any discussion with depositories on the pre-IPO trading platform, Pandey said, "This is only in principle with what I am stating." Additionally, this will explore emerging areas, products and asset classes that create both demand and supply of capital, he added.

While speaking at the event, the SEBI chief also said that the market regulator is looking at increasing the tenure of equity derivatives after discussion with stakeholders, and a consultation paper in this regard will be initiated. This had triggered a sharp fall in capital market stocks like BSE and Angel One during the day.

"Improving the tenure (of the F&O contract) really means whether we can have more longer-term derivatives," said Tuhin Kanta, adding, "Qualitatively we have to see (the duration of the contracts), but we have to calibrate it. My statement says in a calibrated manner. This is only in-principle we're stating, on what we should be doing."

Also read: SEBI hints at product suitability mechanism for F&O segment; approach to be consultative and analytical

(With inputs from PTI)