Regulations
SEBI tweaks norms for OFS, IPP

SEBI decided to relax the mandatory 12-week time gap requirement between two consecutive OFS or IPP that would help companies to offload shares in more than one tranches depending on market conditions

 

Mumbai: To smoothen the process of disinvestment, capital market regulator Securities and Exchange Board of India (SEBI) has tweaked norms governing offer for sale (OFS) and institutional placement programme (IPP).

IPP and OFS are the two new share sale tools introduced by the regulator in January this year, especially to help corporates increase their public float.

The regulator has decided to relax the mandatory 12-week time gap requirement between two consecutive Offer for Sale (OFS) or Institutional Placement Programme (IPP).

However, a gap of two weeks between two successive OFS or IPP should be maintained, it said, adding, this would also be applicable on promoters who have already offloaded their shares through OFS or IPP.

The reduction in the time gap will help companies to offload shares in more than one tranches depending on market conditions.

The board also decided that indicative price should be displayed during the last 60 minutes of the close of bidding session irrespective of the book being built.

However, as per the existing provision, bids were invited without disclosing indicative price during the trading hour.

The display of indicative price could also lead to bidding happening at the last one hour of trade.

"These changes have theoretical significance as market conditions are not very conducive for public offers," SMC Global equity head Jagannadham Thunuguntla said.

The decision will also help the government to expeditiously offload its stake in public sector companies and raise funds for achieving the disinvestment target of Rs30,000 crore for the current fiscal.

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SEBI to hold special auction of debt securities on 4th July

After RBI increased the limit of FII investments in government debt and initiated other steps, SEBI will hold a special auction on 4th July for foreign institutional investors

 

Mumbai: Market regulator Securities and Exchange Board of India (SEBI) said a special auction of debt securities for foreign institutional investors would be held on 4th July, reports PTI.

The announcement comes a day after the Reserve Bank of India (RBI) increased the limit of FII investments in government debt and initiated other steps, as part of efforts to boost fund inflows and arrest the sliding rupee.

"It has been decided that additional limit for FIIs investments in government debt long term category and corporate debt long term infra category (with one year lock-in and 15 months residual maturity), shall be allocated through special auction.

"The auction for this limit shall be done on the BSE from 15:30 hrs to 17:30 hrs, on Wednesday, on 4 July 2012," SEBI said in a circular.

On Monday, RBI said the limit for FII investments in government debt has been increased by $5 billion taking the overall limit to $20 billion.

Further, the conditions for the limit of $22 billion for FII investment in corporate debt long term infra category, including the sub-limit of $5 billion with one-year lock-in/residual maturity requirement and $10 billion for non resident investment in IDFs have been changed.

The lock-in period for investments under this limit has been reduced to one year.

According to the circular, the allocation of additional limits under government debt as well as corporate debt categories would be auctioned through electronic bidding process.

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SEBI imposes Rs2 lakh fine on trader for defying order

SEBI imposed the penalty on Piyush Kanungo, one of the accused in the Pyramid Saimira case, who has already been banned from trading in stocks of any company

 

New Delhi: Market regulator Securities and Exchange Board of India (SEBI) imposed a penalty of Rs2 lakh on Piyush M Kanungo, who has already been banned from any share transaction in the Pyramid Saimira case, for trading in stocks of a company, reports PTI.

"After taking into consideration all the facts and circumstances of the case ... a penalty of Rs2 lakh under section 15 HB of SEBI Act, on the Noticee (Kanungo)," a SEBI order stated.

Earlier in 2009, SEBI in Pyramid Saimira Theatre case had directed some persons including Kanungo not to buy, sell or deal in the securities market including in initial public offerings (IPOs), even indirectly.

"However, Kanungo placed a sell order in the scrip of RPL for 500 shares in the cash segment of National Stock Exchange (NSE)," the order said.

NSE brought Kanungo's sell order into the notice of SEBI, which subsequently appointed an adjudicating officer to inquire into the matter.

A show-cause notice was sent to Kanungo and in a hearing on 1st June, he said the trade was not done intentionally but by mistake.

"The noticee (Kanungo) did not comply with the SEBI order which shows his total disregard to the direction of the regulator...This non-compliance cannot be taken lightly," the order said.

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