India markets regulator to consider permitting delisting via fixed price

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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