Sebi cuts cooling-off period for OFS by privately listed illiquid InvITs to 8 weeks
ETMarkets.comAt present, the cooling-off period for transactions - purchases or sales before and after an OFS - is based on liquidity. It stands at two weeks for the most liquid shares, four weeks for liquid shares and 12 weeks for illiquid shares.
Privately listed InvITs face inherent liquidity constraints due to their high trading lot size, which limits participation largely to institutional investors, body corporates and high-net-worth individuals.
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Consequently, trading volumes in such InvITs tend to remain thin and they may fall under the illiquid category because of these structural liquidity constraints.
"Based on the feedback received from market participants and in order to facilitate ease of doing business, it has been decided to reduce the cooling off period for illiquid private listed InvITs. The cooling off period in case of private listed InvITs whose units are illiquid shall be ±8 weeks," the Securities and Exchange Board of India (Sebi) said in its circular.
This will come into force with immediate effect, according to Sebi.