For two consecutive days this week, markets regulator Securities and Exchange Board of India has come out with a series of new norms aimed to bring in transparency and help retail investors actively participate in the stock market.

The regulator has made it mandatory for listed companies to disclose, on a standalone or consolidated basis, their quarterly (audited or un-audited with limited review), financial results within 45 days of the end of every quarter and disclose their audited financial statements within 60 days of every financial year end. It has also made it mandatory for all listed entities to disclose their asset-liability and solvency positions every six months.

As has been seen in the past, many companies take an unusually long time to report financials if they have underperformed in a particular quarter and by delaying the process, investors are deprived of making value judgements. Currently, companies report their balance sheet and cash flow position in their annual report. Investors now have to wait for a full year to know the company?s financial position. This is too long a wait for an investor to make informed decisions on investments and the matter gets even more pertinent after the Satyam creative accounting fraud. After the global financial crisis, the issue of solvency has come to the forefront from the shareholders? perspective and investors.

Equally important are the new regulations to implement peer review among accountants. Schemes of amalgamation, mergers and reconstruction will now be required to be accompanied by an auditor?s certificate. Also, the appointment of chief financial officers would have to be approved by the audit committee of the company after proper assessment of candidates? qualifications, experience and background. If these new norms are followed in the right earnest, it will bring more transparency and efficiency in governance of all listed entities.

A day later, the markets regulator made it mandatory that all companies going for IPOs get their shares listed within 12 days after the close of the offering, down from 22 days now. At present, it takes around 15 days from issue closing to the allotment of shares and one more week for the listing of shares. Last year, Sebi chairman CB Bhave had floated the plan to reduce the gap between an issue closing and its listing to one week. He also said that the primary market issuance process was not as efficient as the secondary market.

The new move, which will be applicable from May 1, will reduce pre-listing manipulation and make the process more efficient. The shorter time gap will affect the grey market for IPOs, which has witnessed a spurt in activity because most maiden offers have listed at a premium.

Last year, the market regulator introduced the Application Supported by Blocked Amount (ASBA). Under this system, investors can apply for an IPO without transferring the money. The application amount stays in the investor?s account, and is debited when the shares are allotted. The move came after investors complained of delays in getting their refunds, a major bottleneck in the payment and settlement mechanism.

In fact, in the last one year the market regulator has been taking a number of commendable steps in a drive to make the capital markets more investor-friendly. It amended rules for declaring a price band of initial public issues, reduced timeline for bonus issues and changed its rules on mandatory open offers.

The regulator?s suggestion that listed companies must adequately share information will add value to independent research and help investors make informed decisions. The Indian stock market has seen strong growth in the past few years because of interest from both domestic and foreign institutional investors, but low transparency, low trading liquidity and low investor education have stymied its smooth functioning.

Data shows that only 170 firms, or 6% of 2,830 stocks traded on the bourses are covered adequately by research analysts. Limited information hampers trading of small- and mid-sized companies and their valuation tends to suffer as compared to larger companies. As a result, retail investors do not have adequate information to make right investment decisions and this makes them susceptible to market rumours. All these new norms are intended to enable a more open relationship between companies and investors.