The Sebi board, which met here on Monday, has recommended relaxations in the public issue norms for infrastructure companies, development of debt trading, measures for promoting market-making, extension of trading terminals to 1,000 cities by 2000, introduction of domestic depository receipts and a fresh recommendation to the government for introduction of shares buy-back by corporates.

The board also took up the Dhanuka panel report for discussion. However, the report could not be cleared for want of time and the absence of the law ministry representative on the Sebi board.

The board has accepted several recommendations made by chief economic advisor, N Shankar Acharya, for the revival of the primary market.

Some of the recommendations would need to be further examined at variouslevels of the government, including the Department of Company Affairs (DCA) and the Reserve Bank of India (RBI).

One of the measures accepted for immediate implementation is that of routing primary issues mandatorily through the depository after a specified date. The date could be some time in November.

Sebi has allowed 100 per cent book-building in respect of issues of Rs 25 crore and above. It has also been decided to reduce the number of mandatory collection centres with respect to issues above Rs 10 crore to four metropolitan cities apart from the place where the regional stock exchange is situated.

This would be the minimum requirement and the issuers would be free to appoint as many collection centres as they deem fit.

As regards market-making, the Sebi board has decided to request the RBI to extend a line of credit to market intermediaries like merchant bankers and brokers. The RBI nominee on the Sebi board pointed out that the central bank has already issued a circular to this effect which hasstreamlined several anomalies in the earlier procedure.

On development of debt trading, the Sebi board was of the opinion that an effective screen-based mechanism needs to be put in place to bring debt trading to retail investors. It was decided that Sebi would set up a committee in consultation with the RBI to suggest ways in which this could be done.

On buy back of shares, the Sebi board felt that the government should take a decision on this as the market regulator has already recommended that adequate checks and balances need to be put in place before a company is allowed to buy back its shares. It was, however, decided that the recommendations should be submitted once again.

The board also decided that by 2000, trading terminals should be extended to at least 1,000 centres. It has also decided to examine the introduction of a new instrument, domestic depository receipt (DDR).

The board has also decided to allow Sebi to permit applications for new issues to be made through newspapers, subject tolegal provisions in this regard.

It has also recommended that public issues should be allotted through secondary market intermediaries. This is a concept which was put forth by the National Stock Exchange almost two years back. Sebi will seek NSE's view in this regard.

Several relaxations have been made for infrastructure companies wanting to tap the market for raising funds. These relaxations will be applicable to infrastructure companies as defined under section 10 (23G) of the Income-tax Act, provided their projects are appraised by a development financial institution or IDFC or IL&FS.

The projects must also have a participation of at least 5 per cent of the project cost (in debt and/or equity) by the appraising institution.

Such companies will be exempted from the requirement of making a minimum public offer of 25 per cent of its securities. The requirement of 5 shareholders for every Rs 1 lakh of the offer has also been waived.

The minimum subscription norm of 90 per cent has also been removedprovided disclosure has been made about another source of funding which the company has considered in the event of undersubscription.

Infrastructure companies will be allowed to freely price their offerings in the domestic markets provided the promoter companies, along with equipment suppliers and other strategic investors, subscribe to 50 per cent of the equity at the same or a price higher than that being offered to the public.

They would be allowed to keep their issues open for 21 days which would give them adequate time to mobilise funds for their issues. Infrastructure companies would not be required to create and maintain a debenture redemption reserve (DRR) in case of debenture issues.