SEBI's Strategy to Regulate IPOs and Curb Grey Market Trading

SEBI is planning to introduce a system allowing investors to sell IPO shares soon after allotment, intending to curb grey market activity. The regulator also announced the launch of a portal by proxy firms to enhance transparency in related party transactions, aiding stakeholders in evaluating company governance.

The Securities and Exchange Board of India (SEBI) is considering a groundbreaking system allowing investors to sell IPO shares immediately post-allotment. This move aims to curb rampant grey market trading, according to SEBI chairperson Madhabi Puri Buch.

Addressing a gathering of investment bankers, Buch emphasized that the current unregulated pre-listing share trades, often termed 'curb trading,' could be formalized within a structured regulatory framework. The envisioned 'when listed' facility would enable entitled shares to be traded in the organized market between allotment and official listing.

Furthermore, SEBI's chief announced an impending launch of a portal by top proxy advisory firms. This platform will serve as a repository for related party transactions (RPTs), enhancing corporate governance transparency for stakeholders and promoting wider access to crucial governance data.

(With inputs from agencies.)