SEBI proposes changes for startup listing platform
Q. SEBI has proposed a set of changes to relax rules and rename the institutional trading platform as what?- Published on 01 Aug 16a. High Tech Start Up & Other New Business Platform
b. High Tech Incubation & Other New Business Platform
c. High Tech Innovation % Other New Business Platform
d. None of the above
ANSWER: High Tech Start Up & Other New Business Platform
The Securities and Exchange Board of India has proposed considerable changes for startup listing platform to enhance its appeal for new age firms going public in local markets.
- Regulator indicated that based on feedback received from market participants, the decision has been taken to relax rules and rename the institutional trading platform as High Tech Start Up & Other New Business Platform.
- The proposal has been to eliminate the rule which says no single shareholder shall own more than 25 percent after listing, which many promoters were not comfortable with and has increased the allocation of shares more for HNIs and corporates.
- Earlier only 25 percent was reserved for HNIs and corporates.
- The hike in the limit on share allotment to individual institutional investors has gone up from 10 to 25 percent.
- Regulator also proposed to permit market making compulsory for at least three years for IPO of less than INR 100 crore.
- There is no provision mandates market making currently. Under the current rules, startups can also list on the separate institutional trading platforms of stock exchanges.
- Platform has not attracted a single start up for listing so far.
- SEBI has now eased the rules.
- Regulator has also proposed lock in for pre-issue shares held by venture capitalists and employees under the ESOP scheme for six months following the IPO
- Proposal has also been made to lower minimum trading lot from 10 to 5 lakh.
