Sebi to float discussion paper on reducing FPO time line

It will take sometime to come out with a discussion paper for public at large, says U K Sinha

To elicit views from diverse stakeholders, capital market regulator Sebi will come out with a discussion paper on reducing the time line for follow-on public offers.

The proposal for a discussion paper also comes at a time when many public sector companies are gearing up for stake sale as part of government's ambitious disinvestment programme.

"We have received representations that FPO time line should be reduced. We are still examining (the issue) and we will come out with a discussion paper for public at large. It will take some time," Sebi Chairman U K Sinha said today.

He was speaking at an event organised by industry body CII here.

FPO and Offer for Sale (OFS) are seen as preferred routes for selling stakes in public sector companies.

In the current fiscal, the government aims to garner more than Rs 43,425 crore through disinvestment.

However, Sinha said that there is no proposal to change Sebi (Securities and Exchange Board of India) norms for FPOs with respect to retail investors quota.

"If you are asking whether Sebi rules are going to be changed for FPOs, there is nothing on the plate as of now but if an issuer wants to allocate more to retail investors, it is possible," he noted.

In an FPO, at least 35% should be allocated to retail investors.

"As an issuer, if you decide to have 100% (quota) for retail (investors) there is nothing in Sebi laws prevents you," Sinha said.

On changes made in corporate governance norms, Sinha said the regulator has extended the deadline for induction of at least one woman director on a listed company's board to April 1, 2015.

The norm was to come into force from October 1 this year.

"We have done it because the Ministry of Corporate Affairs guidelines towards this end has also been extended. We felt that it is better in at least this matter to synchronise with what the Ministry of Corporate Affairs has done," he noted.

Regarding a query on implementation of IFRS norms, Sinha said the government and regulators are working to ensure that they are implemented within the proposed time frame.

Finance Minister Arun Jaitley, in his Budget speech on July 10, had said there was an urgent need to converge the current Indian accounting standards with IFRS.

"I propose for adoption of the new Indian Accounting Standards (Ind AS) by the Indian companies from the financial year 2015-16 voluntarily and from the financial year 2016-17 on a mandatory basis," he had said.

Meanwhile, responding to a query on whether trading time for currency derivatives would be extended, Sinha said Sebi, RBI and the government are discussing the matter.