SEBI To Review SME IPO Rules, Examine Market-Making And Underwriting Costs

New Delhi, Aug 20 (KNN) The Securities and Exchange Board of India (SEBI) is planning a comprehensive review of regulations governing initial public offerings (IPOs) by small and medium enterprises (SMEs), SEBI Chairman Tuhin Kanta Pandey said on Wednesday.

SME IPO Costs Under Review

Speaking at an industry event, Pandey said the regulator was examining costs associated with SME listings, including market-making and underwriting requirements, reported Economic Times.

"Market making was adding to the cost for small-company IPOs," Pandey said, adding that the underwriting system also needed review as it was not functioning effectively and was imposing significant costs on companies.

A SEBI-appointed working group examining issues related to the SME platform has submitted its report to the regulator. SEBI is expected to issue a consultation paper on the SME platform soon.

Pandey said companies listed on the SME platform should not face disproportionately higher costs compared with mainboard-listed companies.

He also said increasing trading lot and application sizes to limit retail participation on the SME platform had not achieved the intended objective.

New Closing Price Mechanism Detects Manipulation Faster

Pandey also said SEBI's new mechanism for determining the closing prices of frequently traded securities was identifying potential market manipulation significantly faster than the previous system.

SEBI Examines Global Fund Management Rules

The regulator is also examining measures to support global fund management activities from India.

Pandey said proposed changes to portfolio management services regulations would enable fund managers to undertake trading activities from onshore locations.

(KNN Bureau)