Responding to a question on why there was a pause in pro rata formulation, Buch said the process was leading to a certain unnatural price discovery.
“If an investor wants 100 shares, there is an impression that he or she had to apply for 2,000 shares. As a result of this, the price discovery mechanism was being corrupted,” Buch said.
The regulator had earlier said it would address the issue of exorbitant valuation of initial public offerings seen in the recent past.
“In the wake of high pricing of IPOs, retail investors will be better off investing after the dust settles down post debut in secondary market,” Buch had said.
Speaking at CII Global Economic Policy Forum, the regulator is ready to introduce same-day settlement of trades on the stock exchanges by March 2024.
“We are ready to introduce T+0 (T plus zero) settlement trade by the end of the current fiscal,” Buch said.
Sebi, which has already reduced the settlement timelines to as short as one day after the transaction, is now looking to shorten the same further.
Earlier this year, the country’s stock markets transitioned from T+2 to T+1 settlement, settling trades on the following business day.
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