Securities and Exchange Board of India (SEBI)
- Review of Offer for Sale (OFS) of Shares through Stock Exchange Mechanism by Listed Stock Exchanges:
SEBI has issued Circular No. CIR/MRD/DP/36/2016 dated February 15, 2016 regarding Review of Offer for Sale (OFS) of Shares through Stock Exchange Mechanism:
- Comprehensive guidelines on sale of shares through Offer for Sale mechanism were issued vide circular no CIR/MRD/DP/18/2012 dated July 18, 2012. These guidelines have been modified based on the representation/suggestion received from various stakeholders from time to time.
- In order to further streamline the process of OFS with an objective to encourage greater participation of all investors including retail investors, it has been decided that:
- The Seller shall notify to the stock exchanges its intention for sale of shares latest by 5 pm on T-1 day (T day being the day of the OFS). Stock exchanges shall inform the market immediately upon receipt of such notice.
- On the commencement of OFS on T day only non-retail investors shall be permitted to place their bids. Cut off price shall be determined based on the bids received on T day as per the extant guidelines.
- The retail investors shall bid on T+ 1 day and they may place a price bid or opt for bidding at cut off price. The seller shall make appropriate disclosures in this regard in the OFS notice.
- Settlement for bids received on T+1 day shall take place on T+3 days (T+1 day being trade day for retail investors). Discount, if any to retail investors, shall be applicable to bids received on T+1 day.
- In order to ensure that shares reserved for retail investors do not remain unallocated due to insufficient demand by the retail investors, the bids of non- retail investors shall be allowed to carry forward to T+1 day.
- Unsubscribed portion of the shares reserved for retail investors shall be allocated to non-retail bidders (un-allotted bidders on T day who choose to carry forward their bid on T+1 day) on T+1 day at a price equal to cut off price or higher as per the bids. In this regard, option shall be provided to such non-retail bidders to indicate their willingness to carry forward their bids to T+1 day. If the non-retail bidders choose to carry forward their bids to T+1 day, then, they may be permitted to revise such bids. Settlement for such bids shall take place on T+3 day.
- These shall come into force form March 01, 2016.
- Securities and Exchange Board Of India (Substantial Acquisition of Shares and Takeovers) (Amendment) Regulations, 2016:
SEBI vide Notification No. SEBI/LAD-NRO/GN/2015-16/035 dated 17th February, 2016 has made the following regulations to further amend the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011:
- These regulations may be called the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) (Amendment) Regulations, 2016
- In the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, in regulation 3, after sub- regulation (3), the following subregulation shall be inserted, namely,-
“(4) Nothing contained in this regulation shall apply to acquisition of shares or voting rights of a company by the promoters or shareholders in control, in terms of the provisions of Chapter VI-A of Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009.”
- These regulations shall come into force from 17th February, 2016.
- Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) (Second Amendment) Regulations, 2016:
SEBI vide Notification No SEBI/LAD-NRO/GN/2015-16/036 dated 17th February, 2016 has made the following regulations to further amend the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009:
- These regulations may be called the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) (Second Amendment) Regulations, 2016.
- In the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009, after Chapter VI, the Chapter VI-A which is conditions and manner of providing exit opportunity to dissenting shareholders shall be inserted.
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