Regulation 37 - Lock-in of specified securities held by persons other than promoters - Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009

Lock-in of specified securities held by persons other than promoters. 37. In case of an initial public offer, the entire pre-issue capital held by persons other than promoters shall be locked-in for a period of one year: Provided that nothing contained in this regulation shall apply to: (a) equity shares allotted to employees under an employee stock option or employee stock purchase scheme of the issuer prior to the initial public offer, if the issuer has made full disclosures with respect to such options or scheme in accordance with Part A of Schedule VIII; 1 [(b) equity shares held by a venture capital fund or alternative investment fund of category I [or category II] 2 or a foreign venture capital investor: Provided that such equity shares shall be locked in for a period of at least one year from the date of purchase by the venture capital fund or alternative investment fund or foreign venture capital investor.] Explanation: For the purpose of clause (b), in case such equity shares have resulted pursuant to conversion of fully paid-up compulsorily convertible securities, the holding period of such convertible securities as well as that of resultant equity shares together shall be considered for the purpose of calculation of one year period and convertible securities shall be deemed to be fully paid-up, if the entire consideration payable thereon has been paid and no further consideration is payable at the time of their conversion. ****** 1 Substituted for the existing clause (b) by SEBI (Alternative Investment Funds) Regulations 2012, w.e.f. 21.5.2012. Prior to its substitution, this clause read as under: (b) equity shares held by a venture capital fund or a foreign venture capital investor for a period of at least one year prior to the date of filing the draft prospectus with the Board: 2 Inserted by SEBI (Issue of Capital and Disclosure Requirements) (Third Amendment) Regulations, 2017, w.e.f. 31.07.2017 for RHPs registered with the Registrar of Companies on or after 31.07.2017.