Enhanced disclosures for F&O in the works: Buch – Blue Barrows

The Securities and Exchange Board of India (Sebi) is evaluating enhanced disclosure of information for investors participating in the futures and options segment, its chief Madhabi Puri Buch said on Tuesday.

Buch said the regulator is analysing data on retail participation in the F&O segment. She didn’t give specifics of the proposed disclosure norms. “Sebi will continue to be consultative and democratic in its approach while making regulations and be driven only by data,” she said.

On start-up valuations, the Sebi chairperson also said the regulator has no business to suggest pricing of initial public offers (IPOs) of new-age technology companies. “A lot has been said about the pricing of IPOs of tech companies… at what price you choose to do … is your business, we have no business to suggest otherwise,” Buch said at the capital markets conference organised by Ficci.

There need to be more disclosures on how valuations have changed between a pre-IPO placement and the issue price, she said. For example, a company sells shares to investors at ₹100 and then asks for ₹450 in an IPO within a few months. A company is free to ask for a higher price, but it needs to disclose what happened in the intervening period which justifies the change in valuation, Buch said.

Buch took charge at Sebi in March. She has also carried out a reorganisation exercise where three officials in each department have been given a key responsibility area (KRA) to come out with ideas on regulation the industry will ‘celebrate’.

She also said the regulator is reviewing the Sebi Act and has put in a request to change certain provisions in the Act related to the regulatory sandbox.