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Sebi amends takeover regulations, buyback norms
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SME Times News Bureau | 22 Jun, 2018
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.
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