Market regulator Securities and Exchange Board of India (SEBI) decided to expand the scope of employees quota in public issues of companies by making staff of subsidiaries eligible to participate in such offers made by the parent firm.

Besides, the SEBI, in its meeting here decided that institutional investors will have to pay upfront 100 per cent money in primary issues like retail investors.

Briefing newsmen about the board meeting, SEBI chairman C B Bhave said it has been decided to establish a mechanism for physical delivery of shares in the derivative segment and it will also work on raising the time period of derivatives contract from three years to five.

The decision to extend the scope of employees quota, he said, will apply to employees of those companies whose accounts are consolidated with the issuing entity.

The decision would be applicable from the date of notification and not with the retrospective effect, he said.

At present, employees are entitled to allotment of shares up to 10 per cent of the issue size.

As regards the decision on Qualified Institutional Buyers (QIBs) for payment of 100 per cent money upfront in public issues, the regulator said ‘the decision will bring parity between retail and QIBs... This will apply from May one.’

UNI