The Securities and Exchange Board of India (SEBI) is planning to launch a “when-listed” platform that will enable market participants to trade in companies that have completed their initial public offerings (IPO) but are yet to list on the stock exchanges, doing away with the grey market price discovery channel.
- The platform aims to reduce ‘grey market activity’ in companies’ stocks.
- The grey market refers to the unofficial trading of securities even before being listed on stock exchanges. This is an unregulated market and works on demand and supply, with investors purchasing or selling shares notionally in the grey market even before they get listed.
- This market is used to gauge the premium or discount at which a company could list. Introducing an exchange platform for trading such pre-listed shares may eliminate the need for such informal channels.
(Source: Indian Express)
