The Securities and Exchange Board of India (Sebi) today said there was a need to urgently put in place norms for private placement by corporates and hinted at putting in place greater disclosure by companies taking the route to raise funds.
"This is an issue that has to be resolved expeditiously. The issue is not about raising large quantities but the question is protection of investor interest through sharing of adequate information," Sebi chairman G N Bajpai said here today.
He, however, said that the government has not asked Sebi to issue the necessary guidelines to regulate the nearly Rs 100,000 crore private placement business. The finance ministry is of the opinion that the business should be regulated and Sebi should be asked to undertake the task.
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As part of the proposed exercise to rate corporates on wealth creation, management and distribution, Sebi has assigned the task of preparing a rating module to three agencies Care, Crisil and Fitch. "They are working out the formula after which we would implement it, though it will not be mandatory for all companies to implement it initially," the Sebi chairman said.
He also said that the regulator was ready to launch the EDFIR, an online system of disclosure, over the next three to four weeks. The system, based on Securities and Exchange Commission of the United States' Edgar Online, would initially provide information on about 200 corporates.
Bajpai also said that the Sebi board would soon decide on the guidelines for takeover code after it has received inputs from the stakeholders. He also said that the Kania committee, looking into demutualisation of stock exchanges would soon present its report after which the proposal would be taken by the board.
Sebi has already issued the necessary notifications banning brokers from being presidents, vice president and treasurer of stock exchanges.