Capital market regulator Securities and Exchange Board of India (Sebi) might consider revising the takeover code to boost merger and acquisition (M&A) activity.
“There are some apprehensions that threshold limits work as obstacles for M&A activity in India, but we are looking at this. If some concrete suggestions come out, we will consider,” Sebi chairman U K Sinha said on the sidelines of an event here.
The revamped takeover code, which came into force in October 2011, increased the open offer trigger from 15 per cent to 25 per cent and the open offer size from 20 per cent to 26 per cent.
Taking over a listed company has become a costly affair for an acquire, complain market participants.
Sinha said Sebi was also revising the consent order mechanism and the new norms could be released in the next three weeks.
Under the mechanism, a company facing a probe, without admitting or denying charges, enters into a settlement with the regulator, subject to certain fines or restrictions. The system has been introduced to cut on costs and lengthy litigation.
Speaking at an event organised by the International Bar Association, Sinha warned against the use of high-speed algorithmic trading.
“Earlier, it was 200 micro seconds speed, then 20 micro seconds and then eight micro seconds, and there are demands to reduce it even further,” he noted. “At some stage, this has to stop. What we need to look at is whether it is serving any public good.”
Algorithmic trading, or high frequency trading, is complex computer-generated trading, based on pre-specified software.
Sinha said like the stress tests conducted on the banking sector, stock exchanges should also be made to undergo tests.
