Market regulator Sebi plans to shorten IPO listing timeline to three days

Currently, listing happens after six days from the closure of IPO

The Securities and Exchange Board of India (Sebi) on Saturday announced its plans to shorten the time taken between the closing of a public issue and listing of the security to three days from six days, at present.

In a discussion paper issued today titled ‘Reduction of timeline for listing of shares in public issue from existing T+6 days to T+3 days’, the market regulator proposed fresh timelines for various activities that take place after the closure of an issue. These include modification of bids, processing and scrutiny of applications, finalisation of basis of allotment and fund transfers.

T is the day of the closure of the issue. The shorter timeline is expected to make the domestic markets more efficient.

“The proposed reduction in timelines for listing and trading of shares will benefit both issuers as well as investors. Issuers will have faster access to the capital raised thereby enhancing the ease of doing business and the investors will have opportunity for having early credit and liquidity of their investments,” Sebi said in a discussion paper.

Industry players said the new timelines could put pressure on the intermediaries such as investment bankers, brokerages, registrars and exchanges. The market regulator expects all the players in the ecosystem to come up to speed with the new timelines.

“To achieve the objective of listing of shares on T+3, the timelines proposed in this consultation paper shall have to be followed by all the relevant stakeholders of the public issue ecosystem,” Sebi mentioned in the paper, inviting public comments till June 3.

Earlier this year, Sebi successfully implemented a shorter T+1 settlement cycle for secondary market trades.