Sebi may ease delisting process, review insider trading rules

livemint.com:

NEW DELHI : Markets regulator Securities and Exchange Board of India (Sebi) is planning to simplify the delisting process for listed companies. Addressing a press conference on Monday, Sebi chairperson Madhabi Puri Buch said the move was important since any participant entering the listed markets should be able to exit it. The regulator is also looking at reviewing the insider trading rules pertaining to ‘trading plans’ to be disclosed by company insiders.

Commenting on how Sebi has facilitated quicker settlement of various transactions including share sales, initial public offerings (IPOs) and mutual fund settlements, the Sebi chairperson said the day is not far when Indian markets could have instantaneous settlement of transactions. The chairperson also said the regulator is exploring a new regulatory architecture for Indian markets wherein the markets regulator lays down its intent through rules and the industry bodies come up with standard practices. Delisting norms prescribe means through which a listed entity can delist itself and become a private company again.

As per Sebi rules, the companies are required to follow what is called reverse book building (RBB) process to gather bids from the investors selling shares. Current rules also mandate any delisting can succeed only if it manages to acquire 90% of the shares in the company. However, some savvy market traders are currently teaming up and collectively buying more than 10% stake in the company and then demand higher offer price from the company.