SEBI Consultation Paper on Institutional Trading Platform

SEBI has released a Consultation Paper for public comments (till 16th November) on Review of framework for Institutional Trading Platform on 26th October, 2018.

Currently, the framework for ITP is specified under chapter X of the SEBI ICDR Regulations, 2018. In view of the evolving start-up ecosystem and to make the ITP platform more accessible, SEBI discussed the issues with various stakeholders and constituted a Group on June 12, 2018 to review the ITP framework.

Important changes proposed by the consultation paper are:

  1.  To rename the platform as ‘Innovators Growth Platform’ (“IGP”) from ‘Institutional Trading Platform’.
  2. Change in eligibility  for listing on the ITP by replacing Regulation 283(1)(b) with  “In order to be eligible for listing on the ITP, 25% of the pre-issue capital, for at least a period of 2 years, should have been held by Qualified Institutional Buyers/other regulated entities* and/or Accredited Investors (AIs)** out of which not more than 10% should be by AIs.
  3. Removal of Regulation 283(2) to remove separate capping post IPO shareholding.
  4. Reduction of  minimum application size in secondary market from 10 lakh to 2 lakh.
  5. Removal of minimum reservation of allocation to any specific
    category of investors. Currently, it is allocated as75% of the net offer to public to institutional investors and remaining 25% to Non Institutional Investors.
  6. Reduction in minimum number of allottees from 200 to 50.
  7. Reduction of  minimum trading lot size in secondary market from 10 lakh to 2 lakh.
  8. IGP will be designated as a Main Board platform for start-ups with an option to
    trade under regular category after completion of one year of listing instead of 3 years.
  9. Reduction in minimum offer size to 10 crores from 25 crores as per Rule 19(2)(b) of Securities Contracts (Regulation) Rules, 1957.