Context: The Securities and Exchange Board of India (SEBI)  is introducing a "when-listed" platform to reduce grey market activity.

About When-listed Platform

• It is for trading of shares of companies that have finished their initial public offering (IPO) and are yet to be listed on stock exchanges.

• This is aimed at reducing the activity in the grey market, which is largely unregulated and has a significant influence on listings.

• Aim: To reduce ‘grey market activity’ in companies’ stocks. 

How does it work?

• This platform will allow trading of shares between the allotment of shares after an Initial Public Offering (IPO) and the official listing on stock exchanges. 

• It will provide a regulated environment for trading unlisted shares during this interim period.

• SEBI is trying to address the issue of grey market with the "when-listed" platform.

• Currently, investors engage in unofficial trading (kerb trading) during this period, which SEBI wants to regulate. 

• The "when-listed" platform will formalise this process and offer a safer, organized option for investors.

Benefit to Investors

• Provide investors with a secure, regulated environment to trade shares they have been allotted in an IPO, even before the shares are officially listed.

• Ensures transparency and reduces the risks associated with grey market trading. 

• Investors can sell their allotted shares in a legitimate, monitored market, providing them with a safer and more reliable option.

What is the Grey Market?

• It refers to an unofficial trading of securities even before they are listed on a stock exchange. This is an unregulated market and works on demand and supply.

• Many investors look at the premium offered in the grey market for stock of a company which has launched an IPO, before considering investing in the offer.

• To curb grey market activity, SEBI is working on launching ‘when-listed’ platform