Stock market regulator Securities & Exchange Board of India (Sebi) on Wednesday unveiled a series of operational reforms aimed at providing relief to investors and issuers. Sebi made changes to the pricing norms for qualified institutional placements (QIPs) and preferential allotments, and collapsed the timeline for rights issues to 43 days to reduce risk for both investors and issuers.

Sebi has also decided to amend Clause 41 of the Listing Agreement to give companies more time to declare consolidated results. Besides, it has also telescoped the timeline for mutual funds to declare annual results from the present six months to four.

The decisions were taken at a keenly watched meeting of the Sebi board in Mumbai. The board also discussed the hotly debated issue of the extant participatory note (P-note) norms for FIIs, but did make any changes. There was intense speculation in the run-up to the meeting on whether the regulator would relax some curbs imposed on P-notes last October.

Addressing a packed press conference after a meeting of the Sebi board, Sebi chairman Chandrashekhar Bhaskar Bhave said while the existing Sebi guidelines for preferential and QIPs require that the floor price for the issue of securities be the higher of the average of the weekly high and low of the closing prices of the shares during the two weeks or six months preceding the relevant date, the Sebi board has now decided to allow the floor price for such issues to be based on just a two-week average.

The relevant date is currently defined as a date 30 days prior to when shareholders meet to approve the issue. This has now been amended to make the relevant date for QIPs to be the date on which the board of the company, or the committee of directors duly authorised by the board of the company, meets to take the decision to open a QIP.

No change is contemplated in the relevant date for preferential allotment, as the resolution for preferential allotment is valid only for 15 days against one year for QIPs, Sebi said. Rights issues would now be completed within 43 days, as opposed to 109 days currently, Bhave said.

Explaining the changes in the QIP pricing norms, Bhave said: ?The board decided that in this kind of volatile market, the price uncertainty is so much that it will not be practical to have a six-month average, and issuers will be allowed to make them on the basis of the last two weeks? average price. The practice in some other markets is to allow the price on the day on which the issue is made. We haven?t gone to that degree of proximity, but want to move closer to global practices.?

?One of the things corporates have been saying was that the rights issue process takes a long time. The board had given us a mandate in the March meeting to examine whether the efficiency in the primary market can improve on similar lines as that of the secondary market. Rights issues can now be completed in 43 days instead of 109 days earlier. This will reduce risks for the investor because the price is determined way back and the issue process takes its own time. It will also reduce risks for corporates,? he added.

Bhave said the board had asked the regulator to review the matter further, since 43 days is also not seen as an ideal time for completing an issue. ?We will now see whether the process itself can be changed in a manner that it can be done faster,? the Sebi chairman explained.

The reduction in timelines would reduce the market risk faced by investors and issuers and would ensure faster turnaround of money for investors. The Sebi (Disclosure & Investor Protection) guidelines and the Listing Agreement would be amended for this purpose.

The reduction in timeline approved for rights issues include: the number of days for the notice period for a board meeting to be reduced from seven days to two working days; the notice period for record date to be reduced from 15/21/30 days to seven working days for all scrips; issue period to be reduced from minimum 30 days to a minimum of 15 days with a maximum of 30 days; and the time for completion of post-issue activity to be reduced from 42 days to 15 days.

Bhave also commented on a range of other issues. P-note policy: Bhave said: ?The board did discuss the P-notes data that Sebi has, but there was no decision taken by it about the P-Note issue. A number of FIIs have come up to register as FIIs and sub-accounts. There has been a big increase. Sebi had decided in October that it would take a review, so it took a review.? On when the next review of the P-note policy will be, he said: ?I don?t know when the next review will be, but the next board meeting will be after two months.?

Clause 41 changes: Bhave said that the board had also cleared changes to Clause 41 of the Listing Agreement to enable companies, which have a number of subsidiaries and seek to declare consolidated financial results, to do so within two months of the end of the quarter. Those declaring standalone results will still be required to do so within a month. Currently, both standalone and consolidated results need to be declared within a month.

MF results & reporting: The board approved the proposal for prescribing and standardising the format for abridged scheme-wise annual reports and reduction in time for dispatching the report to unit-holders from six months to four months. The new time limit for dispatch will be made applicable for annual reports of 2008-09 onwards, Bhave said.

Institutional margins: Bhave said institutions have to pay margins on T+1 basis. A T+0 level of margining, he said, was difficult since there were restrictions on FIIs on how they are to handle any money, which has come in advance. ?So we will stay at T+1 for now.?

Currency futures trading: He said three applications, from NSE, BSE and an MCX subsidiary, had been received and are at different stages. ?NSE has been given an in-principle approval. The MCX subsidiary needed approval of the name to register it with RoC and that has been given. BSE is not yet at a stage where it can be given in-principle approval,? Bhave explained.

The Application Supported by Blocked Amount project: The process was going forward and two exchanges tested. Banks will now have to test sharing of data with share registrars. ?When we are confident that banks are ready, the next step will be that of making that option available to investors.?

BSE?s problems: He said not giving approval to BSE for currency futures yet had nothing to do with the resignation of CEO Rajnikant Patel. ?Whenever BSE is prepared to the NSE level, it will get approval.? On developments at the exchange?s board level, he said Sebi would have little to say on the way the board ran the bourse. ?But if there are issues relating to integrity of the market, Sebi would certainly intervene.?