SEBI Reduces Share Listing Timeline To 3 Days, Mandatory After December 1

As per the capital market regulator, the new timeframe will be voluntary for all public issues opening on or after September 1 and mandatory for all the issues which come after December 1. 

In the circular, the SEBI also outlined revised timelines for the listing of specified securities and the various steps involved in the public issue process.

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The Securities and Exchange Board of India (SEBI) on Wednesday announced to reduce the existing timeline for listing shares in the stock exchange after the closure of the IPO to 3 days (T+3 days) from the current 6 days (T+6 days). 'T' denotes the issue closing date. As per the capital market regulator, the new timeframe will be voluntary for all public issues opening on or after September 1 and mandatory for all the issues which come after December 1. The move came after the board of SEBI approved a proposal in this regard in June. 

"Consequent to extensive consultation with the market participants and considering the public comments received pursuant to consultation paper on the aforesaid subject matter, it has been decided to reduce the time taken for listing of specified securities after the closure of public issue to three working days (T+3 days) as against the present requirement of 6 working days (T+6 days). 'T' being issue closing date," SEBI said.

In the circular, the SEBI also outlined revised timelines for the listing of specified securities and the various steps involved in the public issue process. According to the new guidelines, key activities such as investor application submission, bid modification, bid details validation with depositories, UPI mandate transaction reconciliation, UPI mandate acceptance, and issue closure will all occur on T day.

Third-party checks for both UPI and non-UPI applications, submission of final certificates, finalization of rejections and basis, approval of basis by the stock exchange, and initiation and completion of fund transfer instructions for debit and unblock will all take place on T+1 day. Corporate action for the credit of shares, filing of listing applications with stock exchanges, issuance of trading notices, and the publication of allotment advertisements on relevant websites will all be executed on T+2 day.

The publication of allotment advertisements in newspapers will be completed by T+3 day, but no later than T+4 day. Trading of the stock will officially commence on T+3 day. The circular also said that the T+3 timeline for listing will be prominently disclosed in the offer documents of public issues.

The step will provide stock issuers with faster access to the capital raised. For investors, this would translate into quicker credit and liquidity for their investments.

SEBI also said that any compensation owed to investors due to delays in unblocking ASBA application funds will be calculated from T+3 day. SEBI also said that the registrar to an Issue will carry out third-party verification of applications. This verification process involves cross-referencing the PAN available in the demat account with the PAN associated with the applicant's bank account.