SEBI says, forget refunds! Pay only after you are allotted
Life will become a little
more simple now for retail investors. Capital market regulator, Securities and Exchange Board of India (SEBI), has given an in-principle nod to a substitute form of payment for public and rights issues, which will facilitate applicants to maintain money in banks till actual allotment of shares. The move is expected to abolish hassles related to refunds. As per norms the bank will mark a lien on the customer’s account to guarantee that the required sum is safe until the allotment process is finalised. In case the allotment does not take place, the money gets mechanically unlocked and is at the investor’s disposal. This simply means that investor’s money marked for the IPO cannot be used for any other purpose.
Undoubtedly, SEBI’s move aims at preventing reoccurance of the situation when many investors failed to invest in attractive IPOs for the fact that they could not get back their money, locked with the mega IPO of Reliance Power, in time.
Further, SEBI has decided that “portfolio managers should not float a scheme or pool the resources of clients in a way which is akin to mutual fund activity.” Which means portfolio managers now will have to operate individually. And to make sure that such managers have sufficient resources before they deal with investors money.
Life will become a little
more simple now for retail investors. Capital market regulator, Securities and Exchange Board of India (SEBI), has given an in-principle nod to a substitute form of payment for public and rights issues, which will facilitate applicants to maintain money in banks till actual allotment of shares. The move is expected to abolish hassles related to refunds. As per norms the bank will mark a lien on the customer’s account to guarantee that the required sum is safe until the allotment process is finalised. In case the allotment does not take place, the money gets mechanically unlocked and is at the investor’s disposal. This simply means that investor’s money marked for the IPO cannot be used for any other purpose.Undoubtedly, SEBI’s move aims at preventing reoccurance of the situation when many investors failed to invest in attractive IPOs for the fact that they could not get back their money, locked with the mega IPO of Reliance Power, in time.
Further, SEBI has decided that “portfolio managers should not float a scheme or pool the resources of clients in a way which is akin to mutual fund activity.” Which means portfolio managers now will have to operate individually. And to make sure that such managers have sufficient resources before they deal with investors money.
Read these article :-
ZEE BUSINESS BEST B SCHOOL SURVEY
B-schooled in India, Placed Abroad (Print Version)
IIPM in Financial times (Print Version)
IIPM makes business education truly global (Print Version)
The Indian Institute of Planning and Management (IIPM)
IIPM Campus
