Sebi may discuss variable load, mkt reforms today

Matters relating to possible reforms in primary market issuances and mutual funds along with a few critical internal issues could come up for discussion at the Securities and Exchange Board of India’s (Sebi’s) board meeting on Monday. Sources close to the development said that the board could also discuss the IPO scam involving National Securities and Depository (NSDL).

In the first board meeting of this financial year, the regulator is also likely to discuss one of its committee's recommendations for introducing new derivatives in order to boost liquidity. Continuing with its earlier discussions, the board, even this time, would consider ways to bring in further reforms to primary market issuances.

While a senior Sebi official, who is a board member, declined to comment on the agenda for the board meeting, sources close to the development said that it would also consider the members' opinion on bringing over-the-counter (OTC) corporate bond transactions under clearing entities.

The regulator is yet to update its website with details of the order against NSDL in the matter of opening over 50,000 fictitious demat accounts for initial public offers (IPOs) during 2003-05. Although the Sebi board does not have the authority to modify the order, or delay in making such orders public, sources confirmed that on Monday, the board would discuss the issue and update the website with relevant details without any further delay.

Following a host of recommendations by the primary market advisory committee, the Sebi board is likely to discuss ways to crunch the currently prescribed timelines for various primary market issuances. The discussion would look at options to reduce the timelines for settlements and allotment of shares in public issues.

Sebi Chairman C B Bhave had recently announced at a conference that the regulator was in discussion with the Reserve Bank of India (RBI) in an effort to route OTC corporate bond transactions through clearing houses.

The effort is aimed at mitigating counterparty risks involved in such OTC deals and revive the volumes in the hitherto ailing corporate bond market. The regulator might raise this issue as well at its Monday board meeting, said another source close to the development.

Although the regulator has been seeking public comments on various other issues such as extension of trading hours on exchanges and broadening the currency derivatives market, some industry experts believe that these issues may not form a part of the board meeting agenda.