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Vivek Law
Mumbai, Sept 18: Sebi has decided to convene a joint meeting with market intermediaries on the primary market module of NSDL. The depository, on the other hand, is targeting the UTI Bank issue to test its primary market module.
This meeting has been convened with an aim to seek a feedback from the market intermediaries about difficulties, if any, in implementing the primary market module of the depository. Sebi had announced that all public issues from a specified date will be allotted only in the demat mode. Sebi officials had refrained from announcing a date as they wanted to ascertain the preparedness of NSDL.
The first round of meetings with NSDL were held earlier this week and depository chief, CB Bhave has been asked to prepare a paper on the entire procedure that would be adopted by the depository in allotment of shares.
Shortly, a meeting will be convened between Sebi, NSDL and some market intermediaries to sound the intermediaries about the processes involved and clarify doubts.
It is nowclear that Sebi is likely to make its diktat effective from November this year. ``We have held the first round of meetings with NSDL and are satisfied with the module. An entire issue could go through in as little as 10 days. We are however keen to get a feedback from the market players as well. We are keen to start off from November this year,'' said a top Sebi source.
NSDL has meanwhile, already held discussions with its depository participants and wants their clients in the UTI Bank issue, to subscribe to demat shares. ``Several of our broker DPs have already told us that they are asking clients to take allotment only in demat shares. We are asking the DPs to test the primary market module in this issue for the eventual movement to the depository mode of primary issuance,'' said a depository source.
The primary market module requires an investor to merely fill in his name and account number in the application form and submit this to the depository participant. The DP will, in turn insert the otherdetails which he already has with him. Subsequently, the applications will be electronically transmitted to first, the depository and then, the registrar and the allotments would be made through the same route.
Earlier, an investor had to fill in the same physical form and send it to the registrar. The registrar used to process the application and allot the shares. Now the investor would only deal with the DP with whom he has a working relationship and will not deal with the registrar.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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