The Securities and Exchange Board of India (Sebi) recently came out with some major reforms and initiatives that have once again pointed to the fact that the regulator will be very active in a volatile market like ours. This article discusses some of these initiatives in details. In July 2002, Sebi launched the Electronic Data Information Filing and Retrieval System, better known as EDIFAR. Sebi in association with National Informatics Center (NIC) set up the EDIFAR website to facilitate the filing of certain documents/statements by listed companies online. This includes electronic filing of information in a standard format by the companies. This system will have several benefits by the way of providing information to various classes of market participants like investors, regulatory organization, research institutions, etc. The objective of EDIFAR is to provide one-point access to key information of all listed companies to the investors. This is useful to both companies and stock exchanges. Currently, Sebi has included more than 2,500 companies under its purview.
Financial statements comprise balance sheet, profit and loss account and full version of annual report; half-yearly financial statements including cash flow statements and quarterly financial statements, corporate governance reports, quarterly shareholding pattern statement and action taken against the company by any regulatory agency are available on the website. According to the listing agreement, listed companies are required to disclose corporate information to the stock exchanges where they are listed and also on EDIFAR. These requirements lead to multiple disclosures/filings for companies that are listed on more than one exchange. Sebi, in consultation with NSE and BSE, is in the process of brining a common electronic platform maintained and run by the stock exchanges. A listed company will be required to file only on this platform for the purpose of fulfilling the requirements of the listing agreement. The proposed platform will introduce single window filing and will also provide one-point availability of corporate information of listed companies.
Electronic Clearing Service (ECS) (Credit Clearing) is a mode of payment whereby an institution having to pay interest, dividend, salary, or pension to a large number of investors, shareholders, employees or ex-employees can make the payments electronically instead of issuing paper warrants. The scheme is operational in 46 cities in India. The scheme benefits all concerned-the corporate bodies (users) in not having to print and dispatch numerous paper instruments, the banks (sponsor bank) in reconciling the figures, the clearing system in not having to deal with paper instruments and the beneficiary (shareholders, depositors, etc.) in getting the credit directly into their bank account on the due date. The primary objective of the system is to provide an alternative method of effective bulk payment transactions, which would hinder the need for issuing and handling paper instruments, and thereby facilitate improved customer service by banks, companies, corporations and government departments effecting the payments. The role of ECS with respect to an Initial Public Offer (IPO) can be defined as the facility through which investors will get their money credited in their accounts, when they are not allotted any shares or when they are eligible for any refund from the company related to the issue.
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