20 January 2022
SEBI in its board meetings dated 28 December 2021 approved a number of amendments with respect to securities regulations. Some of the key amendments approved by the Board are as follows:
Amendments approved to the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 (“ICDR Regulations”) and the SEBI (Listing Obligations and Disclosure Requirements), 2015 (“LODR Regulations”)
a) In cases where an issuer company has mentioned future inorganic growth as an object for the issue under the offer documents, but has not identified any acquisition or investment target, the company may not use more than 35% (thirty five percent) of the total amount being raised for such achieving such objects or for general corporate purposes.
b) The approved amendments also limit the maximum number of shares that may be offered for sale by the pre-existing shareholders of an issuer company which does not fulfil the general criteria for listing as provided under regulation 6 (1) of the ICDR Regulations.
c) Pursuant to the amendments coming into effect, 50% (fifty percent) of the shareholding of the anchor investors shall be locked-in for a period of 30 (thirty) days whereas the remaining portion, shall be locked in for a period of 90 (ninety) days from the date of allotment.
d) Further, SEBI also approved a number of amendments in relation to the monitoring and utilisation of the issue proceeds, the allocation methodology for non-institutional investors and the lock-in provisions in case of preferential issues.
Amendments approved to the SEBI (Mutual Funds) Regulations, 1996
a) The approved amendments mandate mutual funds schemes to follow Indian Accounting Standard (IND AS) from financial year 2023-24 onwards. Further, SEBI has also approved other accounting related regulatory provisions to remove redundant provisions and to bring more clarity.
b) Prior to any winding up of a mutual fund scheme or premature redemption of the units of a closed scheme, the trustees of the mutual funds will be mandated to obtain the consent of the unitholders.
Amendment approved to the Securities and Exchange Board of India (Settlement Proceedings) Regulations, 2018
a) The time period for filing a settlement application has been rationalized to 60 (sixty) days from the date of receipt of the show cause notice or the supplementary notice.
b) Certain provisions relating to the condition precedent for settlement, non-monetary terms, provisions relating to irregularity in procedure, settlement scheme and legal costs, in the settlement process will be clarified.
c) All payments under the Settlement Regulations to be accepted only through the dedicated payment gateway
d) SEBI has also approved the issuance of separate guidelines dealing with the procedure to be adopted for arriving at suitable terms pursuant to filing of a compounding application.
The SEBI board has also approved the introduction of provisions in the LODR Regulations, as per which persons who fail to get appointed or re-appointed as a director or gets rejected by the shareholders at the general meeting of a listed entity, any subsequent appointment or re-appointment shall only be carried out only after obtaining the prior approval of the shareholders.
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