SEBI relaxes norms governing schemes | KPMG | IN

First Notes - 18 January 2018

First Notes - 18 January 2018

SEBI relaxes norms governing schemes of arrangements by listed entities

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Background

The listed entities that desire to undertake a scheme of arrangement or are involved in a scheme of arrangement need to follow the regulations laid down by the Securities and Exchange Board of India (SEBI). On 10 March 2017, SEBI issued a circular number CFD/DIL3/CIR/2017/21 which laid down a revised regulatory framework for schemes of arrangements by listed entities and relaxation under Rule 19(7) of the Securities Contract (Regulation) Rules, 1957.

New development

The SEBI received representations to improve the existing framework governing schemes of arrangements. Additionally, SEBI wanted to expedite the processing of draft schemes and prevent misuse of schemes to bypass regulatory requirements. Therefore, on 3 January 2018, SEBI issued a circular number CFD/DIL3/CIR/2018/2 (the circular) to make certain amendments to the circular dated 10 March 2017.
The recent circular is applicable from the date of its issue i.e. 3 January 2018. Some of the key relaxations provided in the circular relate to the following topics:

  • Submission of documents to stock exchanges
  • Relaxations with respect to locked-in promoter’s shares
  • Extended time period for listing of specified securities.

In this issue of First Notes, we have provided an overview of the key amendments/ relaxations given in the circular.

To access the text of the SEBI circular, please click here.

To access the previous First Notes dated 27 March 2017 on ‘Revised regulatory framework for schemes of arrangements by listed entities’, please click here.

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