New Delhi: As the National Stock Exchange (NSE) gets ready to file its long-awaited initial public offering (IPO) draft papers in the next 3-4 months, a leading legal expert on Saturday said what matters most is full and timely disclosure of all pending cases and risks in the IPO documents.
The capital markets regulator SEBI on Friday gave no-objection certificate (NOC) to the NSE, and the exchange can now finalise the structure and timing of its IPO.
Supreme Court advocate B. Shravanth Shanker told IANS that the long-pending NSE IPO can go ahead even as regulatory cases related to the co-location and dark fibre issues remain unresolved, provided “there is full and timely disclosure of all risks and pending matters in the offer documents”.
He said the IPO process and the settlement of regulatory disputes are two parallel procedures and do not legally block each other.
“What matters most is full and timely disclosure of all pending cases and risks in the IPO documents,” Shanker told IANS, adding that SEBI works on the principles of accountability and transparency, and these are ensured mainly through clear disclosures to investors.
Speaking on SEBI’s decision to grant an NOC for NSE IPO, Shanker explained that the main dispute relates to the placement of brokers’ servers alongside the exchange’s systems under the co-location facility.
“This arrangement allegedly allowed some traders to receive market-sensitive data a few milliseconds earlier, giving them an unfair advantage in high-frequency trading,” he stated.
“Even a small time difference can have a major impact in financial markets, making the issue serious from a regulatory point of view,” he noted.
NSE’s IPO plans were earlier stalled due to the dark fibre and co-location case.
Meanwhile, speaking to IANS, Ashishkumar Chauhan, Managing Director and Chief Executive Officer of the NSE, said on Saturday that the draft papers will take 3-4 months for the Draft Red Herring Prospectus (DRHP) to be made. He also informed that along with preparing the DRHP, NSE will also work in parallel on the offer for sale (OFS) part of the IPO.
(IANS)
