SEBI extends validity period for public /rights issue

Securities Exchange Board of India (SEBI) announced that the validity period of public /rights issue has been revised to 1 year from 3 months, subject to filing of updated document with SEBI where there are material changes.

The market regulator along with approving electronic trading of `rights entitlement` in stock exchanges has also approved the introduction of an alternative mode of application that, ASBA mode (application supported by blocked amount), wherein the amount required for application is blocked in the applicant`s bank account till the time of allotment of the shares.

The mode has already started functioning in the case of application for public issues through select SEBI-approved banks.

SEBI also announced that all new close-ended schemes would now have to be listed on the stock exchanges. This according to SEBI, would also apply to schemes, which have been approved earlier but yet not launched.

This would imply that investors could now make an early exit from such schemes only through the secondary market and not through the fund house.

The regulator also decided to adopt a `code` for members of the board to avoid any conflict of interest that may arise. These would be put up in the public domain before Dec. 12, 2008.