Delisting norms stay unchanged, Board asks SEBI to relook at data
The Board of the Securities and Exchange Board of India (SEBI) has requested the market regulator to revisit and enhance the delisting norms, citing the need for a more robust dataset. There were expectations that the norms would be revised, potentially including a fixed-price option for acquirers; however, no formal announcement was made following the SEBI meeting with its Board.
Madhabi Puri Buch, the Chairperson of SEBI, stated, “It was discussed in the Board meeting. Very happy to report that the commitment for using data for policy making is (so strong) that since the number of delisting applications even over five years is small, the data is very limited to draw significant conclusions (is limited). The Board has asked us to go back and do some consultation because the data set was limited.”
The decision to seek a more comprehensive dataset reflects SEBI’s commitment to informed policy-making and a thorough understanding of market dynamics, particularly in the context of delisting norms. Enhancements to these norms could have implications for market participants, and any revisions will likely be made after careful consideration and consultation.
Madhabi Puri Buch, the Chairperson of SEBI, emphasized the regulator’s commitment to data-driven decision-making. Speaking to the press after the meeting with SEBI’s Board, she stated, “We are committed to data and will do accordingly… it won’t be based on my opinion or your opinion but we will act on the data.”
Buch has previously highlighted the objective of facilitating easier exits for market participants, framing it as an effort to prevent individuals from being trapped, akin to the character ‘Abhimanyu’ from the Mahabharata. She had mentioned earlier that the delisting norms would be a topic of discussion in the Board meeting held on November 25.
This emphasis on a data-driven and logical approach underscores SEBI’s commitment to sound policymaking, ensuring that regulatory decisions are grounded in evidence and analysis rather than subjective opinions or dogma. The regulator’s approach reflects a dedication to fostering a transparent, efficient, and investor-friendly market environment.
Madhabi Puri Buch, Chairperson of SEBI, addressed the notion that the delisting norms would remain unchanged, emphasizing the regulator’s openness to review. She stated, “There was a popular belief that we will never review the delisting norms and that we will always stay with the reverse book-building process. As many of you know, we floated a consultation paper, and we have got a lot of feedback, and at the next Board meeting, we are taking that proposal to our Board.” SEBI had released a consultation paper on reviewing voluntary delisting norms on August 14.
Madhabi Puri Buch’s emphasis on the need for easier trading-plan (TP) regulations aligns with SEBI’s commitment to fostering a market environment that is responsive to the needs of market participants. On November 24, SEBI took a significant step in this direction by releasing a consultation paper aimed at reviewing TP regulations to make them less burdensome.
The proposed suggestions outlined in the consultation paper reflect a nuanced understanding of the challenges faced by market participants and seek to strike a balance between transparency and practicality. Allowing two different formats of disclosure—one with complete personal details for the exchange and another with masked details for the public—acknowledges the importance of transparency while addressing concerns related to privacy and individual security.
Additionally, the proposal to establish price limits for trading plans introduces a mechanism to prevent potential abuse or manipulation, enhancing the overall integrity of the market. SEBI’s dynamic and adaptive approach to market regulations, as demonstrated by its responsiveness to feedback and commitment to reviewing and updating norms, reflects a commitment to creating a regulatory framework that is both robust and accommodating. This approach is essential for maintaining the integrity and efficiency of the securities market while ensuring a conducive environment for market participants.
