Sebi amends takeover regulations, buyback norms

Mumbai: Capital markets regulator Securities and Exchanges Board Of India (Sebi) on Thursday approved changes in takeover regulations to extend the time limit for upward revision of open offer price before the start of the tendering period.

According to the regulator, the amendments are aimed at simplifying the language, removing redundant provisions and inconsistencies and update references to Companies Act, 2013.

“It has been decided to grant additional time for upward revision of open offer price till one working day before the commencement of the tendering period,” Sebi said in a statement.

The Board of the regulator also approved revision of the buyback period of securities.

Under the new regulations, “the buyback period has been defined as the period between board of directors resolution/date of declaration of results for special resolution authorizing the buyback of shares and the date on which payment consideration is made to the shareholders,” the statement said.

Sebi also approved the Issue of Capital and Disclosure Requirements Regulations (ICDR Regulations) 2018 in the meeting on Thursday.

The changes in the ICDR Regulations includes the reduction of the time to announce the price band of an IPO to two days from the earlier five-day limit.

Also, companies would have to make financial disclosures for three years as against the norm of five years currently, it said.

The regulator has also made changes to the threshold for submission of draft letter of offer to Sebi for rights issues.

“Threshold for submission of draft letter of offer to Sebi in case of rights issues to be increased to Rs 10 crore as against the earlier prescribed Rs 50 lakhs,” as per the statement.

Besides, the shareholding of foreign holding will be harmonised to 15 per cent in the Market Infrastructure Institutions (MIIs), Chairman Ajay Tyagi said.

“Eligible domestic and foreign entities, may be permitted to hold up to 15 per cent shareholding in case of Depository and Clearing Corporation, as is the case for Stock Exchanges; Additionally, multilateral and bilateral financial institutions, as notified by the government, have also been recommended to hold up to 15 per cent in an MII,” the statement said.

In this connection, Tyagi said that Sebi has not accepted the recommendations of the committee headed by former Reserve Bank of India Deputy Governor R. Gandhi on the review of regulations and relevant circulars pertaining to MIIs.

“We will have enhanced monitoring and supervision of such intermediaries and we will come out with required circulars,” he said.

“Concept of ‘sponsor’ has been removed in case of depository, with existing sponsor entities being allowed up to five years to reduce their respective shareholding. They can hold upto 15 per cent,” the statement added.

Another change introduced was the decision to discontinue with the category of “Sub-Brokers as Market Intermediaries”.

“No fresh registration shall be granted as Sub-Brokers. Registered Sub-Brokers shall migrate to Authorised Persons or Trading Members as the case may be and Sub-Brokers, who do not choose to migrate, shall be deemed to have surrendered their registration as Sub-Broker,” said the statement.

Talking about the National Stock Exchange (NSE) co-location scam of last year, the Chairman said action had been initiated against persons involved in the case, which will be made public in a few days.

IANS