May 04, 2018

SEBI has issued a consultation paper on Review of SEBI

SEBI has on 04.05.2018 issued a consultation paper on Review of SEBI (Issue of Capital & Disclosure Requirements ) Regulations (“ICDR Regulations”). SEBI had set up a committee in 2017 to review and realign ICDR Regulations with changing market practices and regulatory environment. Further, Primary Market Advisory Committee has also identified certain issues and accordingly made certain recommendations for amendments in ICDR Regulations. Few of the said recommendations are listed hereunder:
  1. To align the definitions of Promoter and Promoter Group with the Companies Act, 2013; 
  2. To restrict the disclosures of group companies to information related to related party transactions and do away with the requirements pertaining to financial information, litigations etc;
  3. To increase the threshold for filing of Draft Letter of Offer for rights issue from the current size of Rs. 50 lakh to Rs. 10 crore and above;
  4. To enable Issuers to undertake public issues whose directors were debarred by the Board in the past and such directors have completed the debarment period;
  5. In case of IPOs, to do away with the requirement that the aggregate of the proposed issue and all previous issues made in the same financial year not to exceed five times the issuer’s pre-issue networth;
  6. To decrease the requirement of announcing floor price/ price band from 5 working days to 2 working days for IPOs;
  7. To rationalize the requirements and contents of due diligence certificate;
  8. To introduce a new section on “Prospectus Summary” in place of the Sub-section “Prominent notes” to risk factors;
  9. To extend the requirement of disclosing the shareholding of ten largest shareholders to shareholders holding 1% and above;
  10. To reduce the disclosure of financials to latest 3 years on consolidated basis and to disclose the Standalone financials of the issuer company and the financials of the subsidiaries on the website of the issuer company;
  11. To rationalize the issue advertisements and also prescribe a format for advertisement on hoardings;
  12. To enable the provisions for SME FPO and Rights Issue;
  13. To merge the provisions of Institutional Placement Programme with those of Qualified Institutional Placement. 
The consultation paper also provides draft amended ICDR Regulations after incorporating proposed policy changes. Stakeholders can provide their comments pertaining to the consultation paper to SEBI on or before May 25, 2018. The said consultation paper is attached for your reference.  
Also, SEBI, vide its circular dated 04.05.2018, has permitted the stock exchanges to set their trading hours in the Equity Derivatives Segment between 9:00 AM and 11:55 PM, thus aligning it with the trading hours for Commodity Derivatives Segment which are presently fixed between 10:00 AM and 11:55 PM. The said circular shall be applicable from 01.10.2018.
For any details and clarifications, please feel free to write to:
Ms. Megha Sharma[email protected]