Sebi, the capital markets regulator, recently put forward a proposal to shorten the deadline for stocks to be listed on stock exchanges after initial public offerings (IPOs) have completed. The current listing period of six days would be reduced to just three days, which should benefit both issuers and investors.
According to Sebi’s consultation paper, this shortening of the deadlines will give issuers quicker access to the capital they have raised, making it easier to do business. In addition, investors are given the opportunity to obtain early credit and liquidity for their investments.
In November 2018, Sebi introduced the Unified Payment Interface (UPI) as an additional payment mechanism along with the Application Supported by Blocked Amount (ASBA) system for retail investors. At that time, Sebi also set the listing schedule of six days (referred to as T+6) after the close of an IPO, where “D” indicates the day of the closing of the offering.
In recent years, Sebi has taken significant steps to streamline activities within the IPO ecosystem and implemented various systemic improvements across all key stakeholders. These efforts have paved the way for a reduction in listing deadlines from T+6 to T+3.
Sebi’s consultation paper proposes shortening the period between the closing date of the issue and the date of the share listing through public offerings. The proposed change would shorten the listing time frame to three days (T+3) instead of the current six days.
To gather feedback on this proposal, Sebi has asked the public for comments until June 3rd.
This move by Sebi follows extensive backtesting and simulations conducted by all parties involved in the IPO process, including exchanges, sponsor banks, the National Payments Corporation of India (NPCI), custodians and registrars. The purpose of these tests was to assess the impact and feasibility of various key activities related to public offerings.
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