In a bid to to protect the interest of genuine investors, the Securities Exchange Board of India (Sebi), on Wednesday, decided to review the process to reduce the gap between the opening of an issue and the listing of shares. The decision was taken by the market regulator at its board meeting held here.
“It is being noticed that there is a long time gap between the opening of an issue and the listing of shares. We will like to compress this time gap,” the newly appointed Sebi Chairman C B Bhave told reporters after the meeting.
The objective behind compressing the time gap is to protect the interest of genuine investors and to curb the grey market taking the advantage of time gap, he added.
The Sebi is in favour of compressing the time gap to maximum of five days, Sebi sources said.
The Sebi Board meeting was addressed by the Finance Minister P Chidambaram, who emphasised on the need for greater investor protection, investor education and market development to increase the base of genuine investors particularly from non-metro cities.
“Finance Minister suggested that interests of genuine investors who put their money for long term investment must be protected,” Mr Bhave said.
Fee lowered
The Sebi Board also announced that its fee structure will be lowered with effect from April one this year. Under the rationalised fee structure the ad valorem fee for filing of an offer document by a mutual fund will be reduced from 0.03 per cent at present to 0.005 per cent subject to a maximum of Rs 50 lakh.
Annual registration fee from custodians will also be reduced from 0.001 per cent to 0.0005 per cent of asset under custody.
This would directly benefit the small investors investing in mutual funds, Mr Bhave said.
Registration fee in case of venture capital fund will be reduced from Rs 10 lakh to Rs 5 lakh.
The fee for filing of offer document in case of public issue will be reduced from 0.03 per cent to 0.005 per cent subject to a maximum of Rs 3 crore.
The Sebi also decided to constitute a committee to oversee the conduct of all proceedings initiated by the market regulator against National Securities Depository Limited (NSDL).
It may be noted that Mr Bhave was heading the NSDL before he was appointed as the Sebi Chairman.