The SEBI is introducing a "when-listed" platform to reduce grey market activity. This platform will allow trading of shares between the allotment of shares after an IPO and the official listing on stock exchanges, providing a regulated environment for unlisted shares. This will ensure transparency and reduce risks associated with grey market trading.
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The Securities and Exchange Board of India (SEBI) to introduce a “when-listed” platform.
The "when-listed" platform is a new initiative by the Securities and Exchange Board of India (SEBI) aimed at reducing grey market activity.
This platform will allow trading of shares between the allotment of shares after an Initial Public Offering (IPO) and the official listing on stock exchanges. It will provide a regulated environment for trading unlisted shares during this interim period.
About Initial Public Offering (IPO)An Initial Public Offering (IPO) is when a private company first sells its shares to the public on a stock exchange. This process is heavily regulated by the Securities and Exchange Board of India (SEBI) and involves detailed due diligence, marketing, and compliance with specific guidelines. |
The grey market refers to unofficial trading of securities before they are listed on the stock exchanges. It is an unregulated market where investors buy and sell shares without delivery of the actual shares.
SEBI is concerned about the grey market because it involves high-risk, unregulated transactions and often misleads retail investors into making decisions based on price premiums that may not reflect the true value of the stock.
SEBI is trying to address the issue of grey market with the "when-listed" platform. Currently, investors engage in unofficial trading (kerb trading) during this period, which SEBI wants to regulate. The "when-listed" platform will formalize this process and offer a safer, organized option for investors.
The "when-listed" platform will provide investors with a secure, regulated environment to trade shares they have been allotted in an IPO, even before the shares are officially listed.
It ensures transparency and reduces the risks associated with grey market trading. Investors can sell their allotted shares in a legitimate, monitored market, providing them with a safer and more reliable option.
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SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI)
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PRACTICE QUESTION Q.The "when-listed" platform, frequently seen in the news, is related to: A) A tool for managing personal finances B) Online education and courses C) Cryptocurrency for digital transactions D) Regulate IPO trading Answer: D Explanation: The Securities and Exchange Board of India (Sebi) to introduce a “when-listed” platform, which will allow trading companies' shares in a period between allotment of shares post the closure of the initial public offering (IPO) bidding process and the official listing on stock exchanges. |
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