Market regulators Securities and Exchange Board of India’s (SEBI) board is set to meet on Friday to discuss a number of proposals, including extension of insider trading norms for mutual funds.
Here are the key considerations of today's board meeting:
The first one is with respect to disclosure norms regarding new age IPOs. There could be an introduction of something that will be called a confidential initial public offering or a pre-filing of IPO. This means that new age companies could file certain basic documents with market regulator SEBI around their IPO and wait for the observation. When the time to file DRHP comes, then if the company is still on track and intends to launch its IPO, then it could file all its documents.
There are instances wherein companies at the last minute withdraw their IPO plans. This situation will be averted if the confidential information is already out in the public domain.
The second thing is essentially disclosure norms for the basis of the issue price of loss-making companies. Right now companies are expected to disclose parameters like RoE, RoC, return on networth and net profit. A lot of these parameters don't really work and give you the right indication for loss-making companies and hence there could be a separate set of parameters, which will come into force as far as the key performance indicators are concerned.
Also bringing mutual fund transactions under the purview of insider trading could be on the agenda. Cutting the timeline for buyback and open offers is another thing which could be brought on the agenda. And finally, the easing of the open offer pricing formula for public sector undertaking is also something that market regulator SEBI will consider in its board meeting.
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