Page 12 - Banking Finance July 2024

ROUNDUP

Forex reserves hit new It also publishes rankings and ratings of lator might be trying to do is bring
institutions, people and processes to some control and sanity in terms of
high of $656 billion
establish high standards in the delivery where the money raised pre-IPO is
The nation's forex reserves continued of finance products and solutions. being used."
to rise for the third week in a row scal-
Bankers have to undertake that pric-
ing a new peak of $655.82 billion, add-
ing $4.31 billion between May 31 and Sebi wants auditors to cer- ing and shareholder disclosures will be
June 7, show the latest data from the tify utilisation of pre-IPO made on the day of allotment through
a public advertisement if any pre-IPO
Reserve Bank.
funds placement is done. A confirmation to
SEBI has asked for auditor-certified dis- this effect should be submitted at the
Sebi receives the Asian closures about utilisation of pre-IPO time of filing the updated or red her-

Banker award proceeds towards objects of the issue. ring prospectus and form part of ma-
If this is not done, the proceeds will terial documents available for inspec-
Sebi has been given 'Best Conduct of tion, according to SEBI.
Business Regulator' award in Asia Pa- have to be attributed or adjusted to-
wards the portion reserved for general
cific by The Asian Banker for its role in corporate purposes (GCP), SEBI's re- Regulator plans to ease
enhancing the regulatory framework
cent advisory said.
for securities markets in India. compliance burden on in-
Since companies cannot spend more
The award was received by Sebi's solvency professionals
than 25 per cent of IPO proceeds un-
Whole Time Member Kamlesh Chandra The bankruptcy regulator has pro-
der GCP, the above rule could take
Varshney in a ceremony held in Hong posed to reduce the compliance bur-
away the flexibility for companies to
Kong. den on insolvency professionals, who
manage their pre IPO proceeds, said
"This authority (Sebi) has been actively experts. oversee the resolution of stressed as-
working towards instantaneous settle- sets, without compromising on the
So, if a company does a pre IPO that
ment. In 2021, T+1 settlement was accuracy and the comprehensiveness
amounts to 20 per cent of the total IPO
introduced in a phased manner, which of the information required for deci-
was fully implemented from January proceeds, its GCP becomes negligible. sion-making.
For example, for a Rs. 100crore issue,
2023. This move has provided investors It seeks to reduce the amount of infor-
if Rs. 20 crore is raised from pre-IPO,
with faster access to their funds follow- mation and data that insolvency pro-
the GCP portion will reduce to Rs. 5
ing trade execution and settlement,
crore (from Rs. 25 crore). fessionals are currently required to
enhancing market efficiency and li- submit, according to a discussion paper
quidity," The Asian Banker said in a "It will take away the flexibility for floated by the Insolvency and Bank-
statement. companies to manage their own fund ruptcy Board of India (IBBI). The regu-
proceeds to some extent," said Munish
Through rigorous enforcement and inno- lator proposes to rationalise compli-
Aggarwal, Head-Equity Capital Mar-
vative regulatory practices, Sebi has sig- ance deadlines to reduce the pressure
kets, Equirus Group.
nificantly improved the conduct of busi- caused by numerous and frequently
ness in the country's financial markets, "If the company certifies its pre-IPO overlapping submission dates. It would
ensuring fair treatment of consumers utilisation, will it be able to use the also combine various reporting systems
and robust market integrity, it added. proceeds the way it wants to? Or can into a single, centralized IBBI website,
the pre-IPO money be used only to- "eliminating duplication and making it
The Asian Banker creates platforms to
wards objects that will be furnished in easier for stakeholders to access and
build a greater sense of community
amongst players in the financial ser- the offer document? use".
vices industry, from traditional banks There's clarity needed on this front," "By significantly mitigating the compli-
and digital disruptors to fintechs and said an industry official. "If we leave ance burden faced by IPs (insolvency
platform players. aside the technicalities, what the regu- professionals), it underscores a com-

BANKING FINANCE | JULY | 2024 | 11