“When-Listed” Platform

Source: IE

Context: SEBI plans to introduce a “when-listed” platform to regulate pre-listing share trading, aiming to curb grey market activities and protect investor interests.

About the ‘When-Listed’ Platform:

• What it is: A regulated platform for trading unlisted shares between IPO allotment and official listing.

• Developed by: Securities and Exchange Board of India (SEBI) in collaboration with stock exchanges.

• Aim: To reduce grey market trading, ensure transparency, and provide a regulated avenue for pre-listing share transactions.

• Features: Allows trading of IPO-allotted shares before official listing. Operates within the T+3 timeline (allotment to listing). Replaces informal grey market trading with a formal, regulated mechanism.

• Allows trading of IPO-allotted shares before official listing.

• Operates within the T+3 timeline (allotment to listing).

• Replaces informal grey market trading with a formal, regulated mechanism.

• Significance: Enhances market transparency and investor protection. Curbs volatility and speculative activities in the grey market. Formalizes pre-listing trading, reducing risks for retail investors.

• Enhances market transparency and investor protection.

• Curbs volatility and speculative activities in the grey market.

• Formalizes pre-listing trading, reducing risks for retail investors.

• What is the Grey Market? The grey market refers to the unofficial trading of securities, particularly shares, before they are officially listed on stock exchanges. It operates outside the regulatory framework, relying on demand and supply dynamics. Transactions are based on notional prices, and no physical delivery of shares occurs.

• The grey market refers to the unofficial trading of securities, particularly shares, before they are officially listed on stock exchanges.

• It operates outside the regulatory framework, relying on demand and supply dynamics.

• Transactions are based on notional prices, and no physical delivery of shares occurs.

• Existing Mechanism: Currently, SEBI mandates that shares must be listed on stock exchanges within three working days (T+3) after the IPO bidding process closes. Allotment of shares is completed on T+1, and trading begins on T+3.

• Currently, SEBI mandates that shares must be listed on stock exchanges within three working days (T+3) after the IPO bidding process closes.

• Allotment of shares is completed on T+1, and trading begins on T+3.

Insta links:

• IPO-grey-market