No grey areas: Regulated trading before listing will increase transparency

Transaction prices on the grey market are opaque and impossible to verify

The Securities and Exchange Board of India (Sebi) is considering asking exchanges to enable a “when listed” section on their platforms where initial public offerings (IPOs) may be traded in the period of three working days between allotment and listing. This is to regularise grey market trading in such shares. The current situation leads to rampant “off-the-books” speculation during that period of hiatus. Sebi Chairperson Madhabi Puri Buch said that a “when listed” section, which allows allotments (rather than the shares themselves) to be traded in organised fashion, would allow a primary investor who received an allotment in an IPO