SEBI To Keep Close Vigil On Stock Exchange Post Election Results

SEBI Steps to Tighten Money Laundering
  • Securities and Exchange Board of India (SEBI) has said that it will keep an eye for any unusual movements in the stock markets the day Lok Sabha election results will be announced and assured its preparedness in risk management, payment and settlement systems.
  • Incorrect pricings of the Initian Public Offernings (IPO) is being practiced by the companies leading to over Rs.60,000 crore worth of IPOs being withdrawn after filing the draft red herring prospectus (DRHP) or allowed to lapse even after SEBI approval.
  • SEBI:
    • Urged domestic players to create an institution for pension funds as this will strengthen the domestic network.
    • Is looking to increase the quota for anchor investors in IPO.
    • Is considering permitting companies to generate funds through convertibles.
    • Along with stock exchange and SIDBI has identified 5-6 SME clusters in India.
    • To protect the minority shareholders, it has directed companies to come up with a time bound comment prior to filing with the tribunal as per Companies Act.
  • Half of the foreign institutional investor (FII) money poured into India was pension fund money, therefore workers of other countries will reap the benefits of a robust economy. More than half of total FII is in the form of equity.
  • Despite FII’s significant role, any word of govt or SEBI amending the regulations generate negative market sentiments.
  • Read at:

Exams Perspective:

  1. What is an Initial Public Offerings (IPO)?
  2. What is a red herring prospectus?
  3. What is the concept of anchor investor?  
  4. What are Qualified Institutional Buyers (QIBs)?