Three crucial changes are being planned to boost primary market sentiments. First, the requirement that a company planning a primary issue must have a dividend paying record of three years is to be eliminated.

Second, the precondition that financial institutions or banks should subscribe to a minimum of 10 per cent of the equity or debt of a project for which a public issue is planned is slated to go.

Last, a 100-page guide of the Securities and Exchange Commission (SEC) of the US on proper usage of English language, while codifying the laws governing stock exchange regulation, will be used as a handbook to eliminate confusion arising out of wrong interpretations given to words and bylaws.The ministry plans to push this primary market agenda strongly with the Securities and Exchange Board of India. The ministry thinksthat a company only needs to be "eligible to pay dividend" and need not necessarily pay dividend for three years to be entitled to come out with a public issue.

This is because the principle behind the imposition of the three-year dividend norm is technically flouted by companies by announcing token payouts of 1 per cent or even less.

The reason why profitable companies wanted to avoid paying dividends was because of the notorious double taxation on dividend-income policy followed by the government till last year. Even though the double taxation burden is now gone, the three-year dividend-paying rule will make profitable companies eligible for a public issue in another two years from now.

In this context the "eligibility to pay dividend" norm will cut through the confusion and will enable any profitable company to tap the primary markets as and when they want to. The other precondition that a manufacturing project must have a 10 per cent contribution of a bank or a financial institution either in theequity or in the debt of a company before it can go public has also been thought to be self-limiting by the ministry. A company should have the freedom to choose the shareholder profile of its equity float without an imposition from the regulatory body, it is argued.

What is more, there could be several companies that may not want to go in for borrowings at all and may prefer to use money mobilised through a risk instrument to finance a project. The 10 per cent precondition excludes such a financing strategy. Most important, the SEC of US guide on use of English language is being sought to be used as a primer for the law makers in the securities market. Phrases in common usage today are confusing, to say the least.