SEBI Plans New System for Immediate IPO Share Sales to Curb Grey Market Trading

With an aim to curb grey market trading, the Securities and Exchange Board of India (SEBI) is planning to bring in a system where investors can sell shares as soon as they are allotted in an Initial Public Offering. 

Addressing an event organised by the Association of Investment Bankers of India (AIBI) in Mumbai yesterday, SEBI Chairperson Ms. Madhabi Puri Buch said if investors wish to sell their shares immediately post allotment or pre-listing, it is better to give them that opportunity in a properly organised and regulated way. She added that discussions are currently underway with two stock exchanges to put in place the “when listed” facility where shares can be



traded during the three days between the allotment and listing.

Talking about the importance of providing sufficient information in IPO documents to enable investors to make informed decisions, particularly with regard to pricing, the SEBI Chairperson said the regulator’s job is not to determine the right price of an IPO but to ensure that investors have access to all the necessary data to assess whether the price is appropriate.

Stating that SEBI is working on developing a standard IPO template, Ms Buch said that the regulator has started using artificial intelligence to review IPO documents.