N.K. Kurup
Veena Venugopal

Bulky paper application forms and multiple point of data capture are believed to have caused the mix-up in basis of allotment of the ONGC issue. Several investors are yet to receive their refunds, nearly three months after the public issue.

Mumbai , June 8

LENGTHY paper applications for IPOs may be the first thing to go once the changes being proposed by Securities and Exchange Board of India's SMILE committee get implemented.

Securities Markets Infrastructure Leveraging Expert Task Force (SMILE), which has been set up after the ONGC IPO imbroglio, is meeting on Wednesday to discuss the possibility of simplifying the current IPO process.

Under the proposed procedure, the applicants to the IPO need not have to fill up the detailed application forms.

All that the applicant needs to provide is the unique identification number (UIN).

Those investors who do not have UIN, will have to provide personal details such as PAN, DP ID, etc as a one time registration requirement.

The investor would be able to place the order for IPO shares by merely calling up the broker or by filling up an application form with the details of the company investing in, UIN and signature.

The broker would confirm the application or the bid (in case of book building) and send a confirmation note to the investor.

All revisions in the bids would be given modified confirmation notes; the investor is expected to confirm the details of this note.

As is usual, the payment mechanism for the investor would be through either cheque or demand draft.

The brokers' accounts would be debited on the second day after the bid is received.

The final amount would be debited on the second day after the day of issue closure, it is suggested.

The committee would also deliberate on the brokers' maintaining a separate account for primary market clearing.

When contacted, the SEBI Chairman, Mr G.N. Bajpai, said the SMILE Committee will be looking at the hardware and software infrastructure requirements across the capital market.

One of the major objectives of SEBI is to help retail investors by simplifying the investment procedure in the equity market.

Bulky paper application forms and multiple point of data capture are believed to have caused the mix-up in basis of allotment of the ONGC issue.

Several investors are yet to receive their refunds, nearly three months after the public issue.

As part of the proposed system, the SEBI committee is expected to consider the suggestion that once the basis of allotment is approved, the registrar could create the allotment and refund files and could credit the demat accounts of the investors directly.

Similarly, in the case of refund, the amounts would be despatched by the registrar to the relevant investors directly.

However, a possible opposition to this move is expected from printers, whose sizeable chunk of revenues come from the printing of IPO application forms.

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