CB Bhave conducted his first Board meet as the Chairman of market regulator Sebi. Bhave told CNBC-TV18 that Sebi has okayed the MoU between the Madras Stock Exchange, and the NSE. He also said that Sebi is looking into cutting the gap between an IPO's closing and listing dates. Bhave said the Board did not take up issue of uniform face value for shares.
Finance Minister P Chidambaram's address to the Sebi board today set the tone for CB Bhave, the new Chairman of Sebi, to chart out a roadmap of priorities. As desired by the FM, carrying on with reforms in the primary market and investor protection are high on his radar.

Sebi Chief CB Bhave believes in black and white. So, his first priority is to ensure the grey market for IPOs is considerably reduced if not totally eliminated. At the Sebi Board meet in the capital today, a decision was taken to compress the time gap between opening of an issue to its listing. Typically, the process takes about 21 days, a period which is used by grey market operators to manipulate the IPO price.

“We have moved to T+2 settlement in the secondary market. So, many felt similar compression was not done in the primary markets,” said CB Bhave.

The FM also addressed the Sebi board today where he raised the issue of developing the Indian capital markets. The new Sebi Chief has responded by rationalising fees charged from intermediaries to increase volumes.

The ad valorem fee for filing of an offer document by a mutual fund has been reduced from 0 .03% to 0.005% subject to a maximum of Rs 50 lakh. The ad valorem fee for filing of an offer document, in case of public issue, has been reduced from 0.03% at present to 0.005% subject to a maximum of Rs 3 crore.

“Since the volumes in these segments are quite large now, we felt there is a case for rationalisation and reduction of rates,” added Bhave.

But he was tightlipped on issues of speculation, IPO price fixation as well as when the stock lending and borrowing scheme comes into effect.
Excerpts from CB Bhave's speech at his Press Conference:
The Board considered the issue regarding the proceedings that SEBI has started or intends to start with reference to NSDL. For this purpose, the Board decided that it will form a committee of three independent Board members headed by Dr Mohan Gopal, Director of the National Judicial Academy and one of the independent members of the SEBI Board. The other two members of this Committee are V. Liladhar, Deputy Governor, RBI, and Anurag Goel, Secretary in the Ministry of Corporate Affairs. The Committee will, if it so desires, seek the advice of Ravi Kadam, Advocate General of Maharashtra in its work.

The Board also looked at the question of rationalizing the fees that SEBI charges from intermediaries. As you all are aware, since the volume of transactions in the market was very high this year compared to what could have been expected, we felt that there was a need to consider whether the fee charge, to some intermediateries or for some activities, can be reduced or rationalized by the Sebi. The Committee under the Chairmanship of Mr Chopra who is a whole-time member of Sebi, was found to examine this structure, their Report was examined by the board, and the Board took a decision, to reduce the fees from between 50%, to 80%, in certain category of cases. A press release will detail out all the areas where this fee reduction will be effective. This fee reduction will be effective from April 1, 2008.

There was also a proposal before the Board on the basis of an application submitted by the National Stock Exchange and the Madras Stock Exchange. They have entered into an MoU whereby the members of the Madras Stock Exchange, can trade on NSE. The Board gave an in-principal approval.