QIBs Will Have To Put 100% Of The Bidding Amount During Public Issues
SEBI has made it mandatory for QIBs to pay 100% money as margin at the time of application for new shares from May 1, 2010. This move by SEBI brings them on par with retail investors. Presently QIBs are required to pay 10% of the value of the shares on application.
By making 100% compulsory for the QIBs at the time of bidding, SEBI intends to curb the aggressive bidding of shares by institutional investors, which results in oversubscription of IPOs.
It has also decided to allow physical delivery of shares in equity derivatives, but the date of its implementation will be decided only after consultation with stock exchanges. Sebi has also decided to allow 5-year contracts in derivatives segment.
The Sebi board also decided that the reservation for employees in public or rights issues would be available to employees of subsidiaries and material associates of the issuer whose financial statements are consolidated with the issuer’s financial statements.
Reference: DNA
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