EXTENSION OF RELAXATION PROVIDED BY SEBI FOR RIGHTS ISSUE

Authored by Lakshmi Rengarajan

SEBI had vide circular SEBI/HO/CFD/DIL2/CIR/P/2020/78 dated 06th May 2020 had provided relaxations pertaining to opening of rights issue under SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 till 31st December 2020.

In this regard SEBI has vide circular SEBI/HO/CFD/DIL1/CIR/P/20 dated January 19, 2021 further provided extension till 31st March 2021 with regard to use of alternate non-cash mechanism to ASBA facility to accept applications form the shareholders in relation to rights issue. However while opting for alternate mechanism the issuer and the lead manager shall ensure the following;

(a) The mechanism(s) shall only be an additional option and not a replacement of the existing process As far as possible, attempts will be made to adhere to the existing prescribed framework.

(b) The mechanism(s) shall be transparent, robust and have adequate checks and balances. It should aim at facilitating subscription in an efficient manner without imposing any additional costs on investors. The issuer along with lead manager(s), and registrar shall satisfy themselves about the transparency, fairness and integrity of such mechanism.

(c) An FAQ, online dedicated investor helpdesk, and helpline shall be created by the issuer company along with lead manager(s) to guide investors in gaining familiarity with the application process and resolve difficulties faced by investors on priority basis.

(d) The issuer along with lead manager(s), registrar, and other recognized intermediaries (as incorporated in the mechanism) shall be responsible for all investor complaints.

Leave a Comment

DISCLAIMER & CONFIRMATION

As per the rules of the Bar Council of India, we are not permitted to solicit work and advertise. By clicking on the "I Agree" button below, the user acknowledges the following:

  • There has been no advertisement, personal communication, solicitation, invitation or inducement of any sort whatsoever from us or any of our members to solicit any work through this website.
  • The user wishes to gain more information about us for his/her own information and use.
  • The information about us is provided to the user only on his/her specific request and any information obtained or materials downloaded from this website is completely at the user's volition and any transmission, receipt or use of this site would not create any lawyer-client relationship.
  • The description anywhere on this website of the results of any specific case or transaction does not mean or suggest that similar results can or could be obtained in any other matter.

The information provided under this website is solely available at your request for informational purposes only and should not be interpreted as soliciting or advertisement. We are not liable for any consequence of any action taken by the user relying on material / information provided under this website. In cases where the user has any legal issues, he/she must seek independent legal advice.