MUMBAI, July 24 (Reuters) – India’s markets regulator will consider permitting the delisting of companies via fixed price instead of the reverse book-building procedure, Chairperson Madhabi Puri Buch said on Monday.
The Securities and Exchange Board of India (SEBI) will issue a discussion paper on the subject by December, the regulator said.
In the reverse book-building process to delist a company from stock exchanges, shareholders place offers for the price at which they are willing to sell securities back to the promoters or large shareholders who can influence company policy.
A delisting price is then calculated based on these offers, but SEBI believes the process can be subject to manipulation.
The market regulator is now considering permitting a promoter to place a delisting offer at a fixed price for shareholders to consider.
SEBI, however, is not in favor of suspending trading in the shares of a company while it goes through the delisting process, Buch said.
Separately, SEBI also intends to strengthen rules for corporate disclosures related to insider trading regulations.
Commenting on a pending decision on a revamp of mutual fund fee structures, Buch said that feedback from the industry is under review.
SEBI is also working on a mechanism for instant settlement of trades, she added.
Reporting by Jayshree Upadhyay in Mumbai; Editing by Dhanya Ann Thoppil, Savio D’Souza and Sohini Goswami
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