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- Sebi Pre listing Trading IPO Curb Grey Market Activity Madhabi Puri Buch
Mumbai4 hours ago
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Market regulator Securities Exchange Board of India (SEBI) Chairperson Madhabi Puri Buch.
Stock market regulator SEBI is considering launching a platform where investors can be allowed to trade in the shares of companies before the listing of the shares. Through this, the regulator wants to stop the gray market activity that occurs during the Initial Public Offer i.e. IPO.
SEBI Chairperson Madhabi Puri Buch gave this information while speaking at an event of the Association of Investment Bankers of India in Mumbai. Butch said, “Informal trading takes place on a large scale between the time the shares are alloted and their trading begins.” If investors want to do this, then why not give them such an opportunity on the regulated platform itself.
Facility to trade shares before listing will be available
Madhabi Puri Buch says that even if trading of shares has not started on the stock exchange before listing, but if the allotment of shares has been done then the investor is entitled to those shares. If the platform starts trading before listing, investors will get the facility to trade shares.
According to media reports, grey-market activity has increased significantly due to the profits from IPO listing. Madhabi Puri Buch said that when she was an investment banker, the gray market activity was called 'curb trading'.
What is gray market?
Gray market is an unofficial platform for dealing in IPOs. Despite being illegal, it is quite popular. However, only selected people do trading in it. In this, trading takes place over the phone with mutual trust. For this it is necessary to have personal contact with the operator. There is no guarantee of deal completion in the gray market.
What is IPO?
When a company issues its shares to the general public for the first time, it is called Initial Public Offering i.e. IPO. The company needs money to expand its business. In such a situation, instead of taking loan from the market, the company raises money by selling some shares to the public or issuing new shares. For this the company brings IPO.