Some other significant decisions were also taken in the board meeting today. The validity of observation letter issued for public and/or rights issue has been extended to one year from the present 90 days. “Companies had approached the Sebi that under the present market conditions they are finding it difficult to bring out an IPO or a rights issue. Consequently, it has been decided to extend the the validity of the observation letter,” said Bhave.

The Sebi has also approved certain policy measures pertaining to rights issues, which include enabling electronic rights entitlement, which can be traded electronically. It has also been mandated that a company can use the funds raised through an issue only after the share allotment has been completed. “To lessen paper work, it has also been decided that investors who hold stocks of a company in the demat form will be given a demat option for rights issue,” said Bhave.

The Sebi board also decided to adopt a code to avoid conflict of interest for the members of the board and the code will be put up in the public domain by publishing it on the Sebi website before December 12, 2008.