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Market regulator Securities and Exchange Board of India (Sebi) on Tuesday made key announcements on number of areas including startup listings, e-IPOs and its merger with commodity market regulator Forward Markets Commission. Addressing the media after the board meeting, U K Sinha, chairman, Sebi said the new listing platform should encourage domestic companies to list in India and help create a vibrant market. Edited excerpts:
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On startup listings
We have had rounds of intensive discussions with the startups in the country. We have taken on board all the requirements listed out by them. As all the suggestions have been accepted I hope this market will become reasonably vibrant. There will be an offer document involved in a startup IPO but the disclosure requirements have been substantially diluted.
On allowing non-tech companies
Whether to allow non-technology startups on the new platform was a big discussion point at Sebi. After much deliberation, we have decided for tech startups will need minimum pre-IPO institutional investor shareholding of 25 per cent, while other companies the institutional shareholding will be 50 per cent to qualify for listing on the new platform.
On crowd funding
Work is on crowd funding regulations. Crowd funding is for very small and early-stage companies which immediately may not be prepared for listing. We might decide very soon on crowd funding regulations too.
On Narayan Murthy panel
The proposal on startups the board has approved today were discussed with the Narayan Murthy committee also. The panel has lot of other mandates. For example, they are working on the crowd funding regulations.
On further reducing IPO timeline
Once we are comfortable that the system is working well with T+6, our attempt will be to go further down. But can’t give a timeline right now as to what is your ultimate goal. Our desire is to reduce it even further.
On e-IPO
For variety of reasons we have retained the possibility of paper-based applications. We have not done away with them. The main idea behind e-IPO was to reduce the listing period. That has been achieved today. When the systems are more ready we will go for full e-IPO.
On applicability of FMC norms
We are reviewing each and every circular and guideline issued by the FMC. We are going to have our own rules and regulations, which will be ready in two months from now. Whatever are the Sebi guidelines, for example in the area of exchange shareholding, the same should apply there. But we will not like to do it in a disruptive manner. It means we will provide reasonable time entities to migrate. That will be the approach we will be following.
On bourses foray into new segments
Under the current law, any exchange wanting to start a new segment needs prior Sebi approval. An exchange cannot start a new segment like currency or equity automatically. Before Sebi gives an approval it checks for the exchange’s preparedness, risk managements systems and other processes.
On FMC manpower
Some of the personnel at FMC is of very good quality. The law passed by the parliament says that FMC staff will be eligible for an induction in Sebi or else they will go back to the government of India. So no one will have any difficulty so far as their job prospects are concerned.
