Global Meet On Dotcom Valuation

The issue of valuation of dotcoms will be discussed by more than 100 securities market regulators next week at Sydney. The meet will try to work out a standard set of accounting norms for valuing these companies.

The International Organisation of Securities Commissions will meet from May 13 onwards on the issue. Its Asia-Pacific chapter will take up the issue in detail, said Securities and Exchange Board of India chairman D R Mehta. Mehta is the chairman of Iosco's Asia-Pacific regional committee.

The regulators will also take up the issue of volatility in stockmarkets across the world.

Mehta told Business Standard the French securities regulator has already done some work on the subject and the Hong Kong regulator too is in touch with Sebi.

 

"US regulators too have raised this issue. There is a need to discuss this issue threadbare as the global markets are affected by the dotcom revolution. In the absence of any standardised accounting norms for these companies, investors wanting to invest in these companies will have no benchmark to go by," said Mehta.

"We are putting in place some valuation norms for dotcoms to ensure that when they come out with IPOs, investors have some standard to compare these companies with. Currently, risk factors in the prospectus have to say that valuation norms for the sector are not standardised," said Mehta.

"The norms would be worked out by the Institute of Chartered Accountants but we want to make a start for protecting interests of investors. But this is not an issue confined to India. Hence, the Iosco convention will be the right forum to discuss it," he added.