FE Report (February 14, 2011)
The government has sought recommendations from the securities regulator -- Securities and Exchange Commission (SEC) -- to overcome the present crisis in the stock market, sources said.
The government has also asked the regulator to be more alert in handling the present situation of the market.
According to sources, the Prime Minister's (PM's) office sent a letter to the SEC last week through the finance ministry, seeking SEC's recommendations on eight points to overcome the present crisis of the stock market.
The SEC in its recommendation said that it would not intervene in liquidity-related issues. And the regulator has empowered merchant bankers and bourses to fix a guideline on margin loans.
The regulator said both the stock exchanges have been given responsibilities to take proper initiatives to control the abnormal prices of the listed companies. The SEC said both the stock exchanges have also been asked to maintain co-ordination between the prices and company fundamentals.
The SEC said presently the regulator is not giving its approval to any company to go public due to present market situation. That's why the regulator has deferred three IPO (initial public offering) proposals, which were submitted for going to public under fixed priced method.
It also said in its recommendation that the regulator would consider the pending IPO proposals only when the market would be able to overcome its crisis.
Recently, the government has postponed the book building method due to its loopholes in helping some companies to take out huge sums of money from the market through over pricing.
But the companies have no bar to go public under fixed price method.
In response to another point, the regulator said uniform software would be introduced in all trading houses to identify market manipulators. It also said the surveillance has also been strengthened to resist the vested quarters.
The regulator said it would help government offload additional shares of state-owned enterprises (SoEs).
The government has sought recommendations from the securities regulator -- Securities and Exchange Commission (SEC) -- to overcome the present crisis in the stock market, sources said.
The government has also asked the regulator to be more alert in handling the present situation of the market.
According to sources, the Prime Minister's (PM's) office sent a letter to the SEC last week through the finance ministry, seeking SEC's recommendations on eight points to overcome the present crisis of the stock market.
The SEC in its recommendation said that it would not intervene in liquidity-related issues. And the regulator has empowered merchant bankers and bourses to fix a guideline on margin loans.
The regulator said both the stock exchanges have been given responsibilities to take proper initiatives to control the abnormal prices of the listed companies. The SEC said both the stock exchanges have also been asked to maintain co-ordination between the prices and company fundamentals.
The SEC said presently the regulator is not giving its approval to any company to go public due to present market situation. That's why the regulator has deferred three IPO (initial public offering) proposals, which were submitted for going to public under fixed priced method.
It also said in its recommendation that the regulator would consider the pending IPO proposals only when the market would be able to overcome its crisis.
Recently, the government has postponed the book building method due to its loopholes in helping some companies to take out huge sums of money from the market through over pricing.
But the companies have no bar to go public under fixed price method.
In response to another point, the regulator said uniform software would be introduced in all trading houses to identify market manipulators. It also said the surveillance has also been strengthened to resist the vested quarters.
The regulator said it would help government offload additional shares of state-owned enterprises (SoEs).
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