SEBI's spat with IRDA attracted lots of attention in the media with SEBI overstepping into the territory of Insurance industry, and at the end SEBI had to give up the case. But for a few instances like that, SEBI has implemented major changes which are good. And it is always good to talk about the positive developments rather than arguing the negatives.Here is a summary of some of them:
(1) Share IPO and MF NFO can be applied with ASBA (Application supported by Blocked Amount). Both Retail investors and Qualified Institutional Bidders (QIB) can now apply for the initial issues without upfront payment. The application amount (supposed to be the invested amount) is blocked in investors bank account. An amount proportion to the alloted shares / MFs is released and the balance is unblocked. Though ASBA didnot takeoff in a big way, it would find acceptance in the days to come.
(2) Gap between the closure of issue and listing of share is reduced from earlier 22 days to just 12 days.
(3) Earlier institutional investors enjoyed the privilege of paying just 10% of total value of shares at the time of investing in share IPO/FPO. But w.e.f 6-Mar-200, all types of investors should pay 100% of application money. Thus leverage investing has been put to and end and the field for retail and institutional investors has been levelled.
(4) Maximum applicaion size for retail investors (which enjoys specific allotment quota) has been increased to Rs.2 Lakhs from Rs.1 Lakhs.
(5) Call auction Process has come into effect from 18-Oct-2010. This Pre-Open session of the stock exchange has three stages :
(a) Order entry period from 9.00 AM to 9.08 AM, when order can be placed, modified and deleted
(b) Order Matching / Comfirmation / Price discovery period from 9.08 AM to 9.12 AM.
(c) Buffer / Transition period from 9.12 AM to 9.15 Am and the actual active market opens by 9.15am.
By this mechanism, the system arrives at the opening price and matches the tradeable order, which gets executed at the opening price at 9.15am. This process enables to reduce volatality in various script at the opening of the market and to arrive at the ideal opening price of scripts.
(6) Option Contract on Sensex and Nifty with tenure of upto five years has been introduces, with eight semi annual contracts of the cycle June-December.
(7) If the promoter fails to exercise the convertible warrants, then he would not be eligible for issue of equity shares / convertible securities / Warrants for further period of one year.
(8) If any member of promoters / promoter group has sold shares in past six months, then the promoters / promoter group would not be eligible for preferencial allotment of shares at lower price.
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