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Sebi in no rush to come up with Spac policy, says Ajay Tyagi

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Sebi in no rush to come up with Spac policy, says Ajay Tyagi

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Capital markets watchdog Sebi on Tuesday ruled out rushing into formulating a SPAC (Special Purpose Acquisition Company) policy to help global / national listing of new era tech companies.

The regulator said there is no pressure now, as many such companies are already traded on national stock exchanges and also because such a policy requires great regulatory clarity.

It can be noted that a PSPC is formed to raise funds through an IPO to buy another company, and this can be done by acquiring an existing operating company, after which the operating company can merge / merge with or can be acquired by the listed company. SPAC instead of its own.

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In other words, at the time of the initial PSPC share sales, they did not have any existing business operations or even stated acquisition objectives. Typically, the money raised through the IPO will come from its sponsors (or founders) and outside investors.

If no target is found, or none is approved by the shareholders of the SAVS, the vehicle is unwound and the money returned to the investors. It can be noted that at the beginning of this year, Byju’s and the food delivery company Swiggy wrote to the Prime Minister, asking him to accelerate a policy allowing domestic companies to list directly on foreign exchanges.

Speaking to the press after a board meeting, Sebi chairman Ajay Tyagi said there is a subgroup on PSPC and they are still working on it.

Without prejudging their next report, let me tell you that since so many tech companies have already completed their IPOs, the pressure on us to formulate a short-term PSPC framework is no longer there. So let’s wait for them to make the necessary recommendations as some of the future PSPCs might not be in Sebi’s regulatory domain.

He also pointed out that more clarity is needed on the role of Sebi and the NCLT in regards to reverse mergers and mergers, as currently this issue is a subject of the NCLT.

“This means that this is a matter of regulatory control since now any merger or reverse merger must go through the NCLT. free time via NCLT, ”said the president.

The idea of ​​a PSPC listing was in the news recently after the world’s most successful education company Byju’s reportedly said it was in talks for a listing in the United States as part of a deal with veteran Michael Klein’s blank check company that could market the online education giant backed by Tiger Global. at $ 48 billion and listing in the United States by mid-2022. Several American companies have used the SPAC route to go public.

Meanwhile, Tyagi parried a question about the impact of the future commodities market due to the frequent ban on trading in certain commodities, such as the latest crackdown earlier last week on derivative contracts on five commodities. .

Without going into the details of the ban, the president said that “that is the view of the government. The government is of the opinion that it should be suspended for a period of time. However, no matter what. my personal views are on the issue “.

On December 20, Sebi banned the launch of new derivative contracts on crude palm oil, moong, wheat, paddy and soybeans and their derivatives with immediate effect until further notice. The list also includes chana and mustard seeds and their derivatives. The move came after the price of these items skyrocketed, causing inflation to rise.

For current contracts, no new position will be authorized to be taken. The instructions will apply for a year, Sebi said last Monday.

(Edited by : Jomy Jos Pullokaran)

Sebi in no rush to come up with Spac policy, says Ajay Tyagi

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