SEBI: Retail investors will now be allocated 35 per cent in IPOs
Mumbai: In sweeping changes made to the depositor and investor protection guidelines, The Securities and Exchange Board of India (Sebi) has raised the allocation of shares for retail investors in book-built issues to 35 per cent from the current level of 25 per cent.

The definition of a retail investor has now been amended to include those investing up to Rs.One lakh in such initial public offerings, up from the prevailing Rs50,000.

In other changes made to the guidelines, Sebi has also reduced the bidding, granting an option to listed issuers to disclose the price band or floor price one day before the opening of bids, while ensuring relevant and uniform bid-data displays on the websites of stock exchanges.

With the increase in allocation size to retail investors, the allocation to non-institutional investors has been reduced to 15 per cent from the current 25 per cent. The allocation to qualified institutional buyers (QIBs) remains at 50 per cent. The bidding period also stands reduced to three working days from the current 5-10 days.

The amendments made with respect to retail investors will be applicable to public issues whose draft offer documents are filed on or after April 4, 2005.
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Sebi and FMC in turf war over gold backed MFs
Mumbai: The Securities and Exchange Board of India (Sebi) is apparently locked in a turf war with the Forwards Market Commission (FMC) over the regulation of exchange-traded gold-backed mutual funds, announced in the Budget for 2005-06.

As per market reports both regulators feel that they should be exclusively regulating the product, with Sebi's contention being that any kind instrument traded on the exchanges automatically falls in its jurisdiction irrespective of whether it is defined as a security under the Securities Contract Regulation Act. Since the product in question is in the mutual fund sector, by definition it should be under SEBI's purview.

The FMC, on the other hand, holds the view that since the underlying asset for such instrument is a commodity (gold), the regulation of the product lies with the commission. Incidentally, gold is not a security under the Securities Contract Regulation Act.

Though the product was announced in the Budget, the Reserve Bank of India has yet to give its approval.
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Saurashtra Kutch Stock Exchange moves towards corporatisation
Ahmedabad: In its transition towards becoming a corporate entity, the Sautrashtra Kutch Stock Exchange Ltd (SKSE) has begun the process of demutualisation by taking up an exercise of division of ownership rights and trading rights in the stock exchange.

Following a Securities and Exchange Board of India (Sebi) directive, SKSE has written to all 416 members, asking them to purchase shares of SKSE. Each member will be required to deposit a sum of Rs500 with the stock exchange and will be allotted 50 shares of Rs100 denomination.

Commenting on the changes that will take place once the demutualisation process is complete, Raval stated that the representation of brokers will come down from the present level of 50 per cent to 25 per cent.

The Saurashtra Kutch Stock Exchange Ltd was incorporated in July, 1989 and has received recognition from the government of India. In December 1999, Sebi permitted the regional stock exchange to acquire membership of bigger stock exchanges like BSE and NSE by forming a subsidiary company and provide trading platform to the brokers of regional stock exchanges.

SKSE floated a subsidiary company namely SKSE Securities Limited which has acquired membership of BSE and NSE.
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