In a bid to reduce the market risks faced by investors and issuers, the Securities and Exchange Board of India (Sebi) has decided to reduce timeline for rights issues, enabling a company to complete the issue in 43 days as against the current period of 109 days. However, the Sebi board, which met here on Wednesday, did not take any decision on participatory notes (P-notes) used by foreign institutional investors. “The reduction in timeline would reduce the market risk faced by investors and issuers and would ensure faster turnaround of money for investors,” Sebi chairman C B Bhave said after the board meeting. As per the new plan, the time for the notice period for a company’s board meeting will be reduced from seven to two working days; the notice period for record date will be reduced from 15/21/30 days to seven working days for all scrips; issue period will be reduced from 30 days to 15 days with a maximum of 30 days and the time period for completion of post-issue activity will be reduced from 42 days to 15 days. “We intend to reduce the timeline further,” Bhave said.On P-notes, Bhave said, “The matter came up before the board but no decision was taken.” The market was expecting the Sebi to extend the 18-month deadline for unwinding investment instruments on derivatives which were banned last October. Bhave refused to comment on the show-cause notices issued to seven investment bankers for their “shoddy work” while handling the public issues in the recent past.The Sebi board also decided to revise pricing norms for qualified institutional placement (QIP) and preferential allotment. It has said floor price should be based on the two weeks average for making a QIP or preferential allotment to QIBs (qualified institutional buyers). The relevant date for QIP should be the date on which the board of the company meets to take the decision to open QIP. “No change is contemplated in relevant date for preferential allotment as the resolution for preferential allotment is valid only for 15 days as against one year for QIP,” it said. Modifying Clause 41 of the listing agreement, the Sebi said a listed entity which submits quarterly and year-to-date standalone financial results within one month of end of the quarter would now get two months — instead of one — to submit consolidated financial results to the stock exchange. “A listed entity opting to submit consolidated financial results in addition to standalone results to the stock exchanges is required to publish consolidated financial results only,” it said. A listed entity would be required to place the limited review report on unaudited financial results before its board of directors before submission to stock exchanges only if the variation between un-audited financials and financials amended pursuant to limited review for the same period exceeds 10 per cent. The board also approved the proposal for prescribing and standardising the format for abridged schemewise annual report and reduction in time period for dispatching the annual report to the mutual fund unitholders from six to four months. The new time limit for dispatching will be made applicable from 2008-09 onwards.The board also approved the opening of Western Regional Office of Sebi in Ahmedabad. The new office would have territorial jurisdiction with respect to the states of Gujarat and Rajasthan for the present while matters with respect to Goa and Maharashtra would continue with the head office in Mumbai. •Timeline to complete rights issue cut to 43 days from 109 days• Pricing norms for QIP and preferential allotment revised• Companies that submit standalone results will get two months to declare consolidated results
