While censuring BSE for lapses during NMDC's Rs6,000 crore OFS, the market regulator has asked the Exchange to conduct independent review for remedial steps
Market regulator Securities and Exchange Board of India (SEBI) while censuring BSE for lapses during NMDC's Rs6,000 crore offer for share sale (OFS), has asked the Exchange to conduct independent review for remedial steps. In an order, Prashant Saran, whole time member of SEBI also advised the market regulator to conduct a detailed probe into confirmation of bids by Citibank NA.
"BSE is hereby directed to engage one or more independent consultants to review the entire sequence of events in the matter, the process followed, checks in place, systems employed while accepting the OFS bids by BSE. The Consultant should bring out the shortcomings, if any, and suggest remedial measures within a period of three months. BSE shall then fix the responsibility internally, both in terms of processes and personnel, and take appropriate action," SEBI said in its order.
In December 2012, SEBI sought an explanation from the BSE for accepting bids for four crore shares after the cut-off time for trading. The rules governing such shares sales say that stock exchanges have to reconcile all orders and payments in the half an hour after trading time - 3.30pm to 4pm -- and that no orders can be accepted after close of trading hours.
However, SEBI found that the confirmation of bids for NMDC's 4.55 crore shares received from Citibank with available funds was clearly not concluded within the stipulated time of half an hour after post close session.
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