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TMI BlogAMENDMENTS TO SEBI (DISCLOSURE AND INVESTOR PROTECTION) GUIDELINES, 2000X X X X Extracts X X X X X X X X Extracts X X X X ..... that of a draft IPO document. (b) It is felt that there is a need to enable well established and compliant listed companies to access Indian primary market in a time effective manner through follow-on public offerings and rights issues. Accordingly, it has been decided to enable listed companies satisfying certain specified requirements to make Fast Track Issues (FTIs). (c) The amendments made vide this circular enable such listed companies to proceed with follow-on public offering/rights issue by filing a copy of the Red Herring Prospectus (in case of book built issue)/Prospectus (in case of fixed price issue) registered with the Registrar of Companies or the letter of offer filed with Designated Stock Exchange, as the case may be, with SEBI and stock exchanges. Such companies are not required to file draft offer document with SEBI and stock exchanges. (ii) Amendments to Guidelines on Issue of Indian Depository Receipts (IDRs) - Presently, SEBI (DIP) Guidelines provide that only Qualified Institutional Buyers (QIBs) can apply in an IPO of IDRs. It has been decided to amend SEBI (DIP) Guidelines to allow all categories of investors to apply in IDR issues, subject to (i) at l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es all directors, CEO and CFO of the issuer company to certify that disclosures made in the offer document are true and correct. It is now clarified that the terms "CEO" and "CFO" in SEBI (DIP) Guidelines shall have the same meaning as assigned to them in clause 49 of the Equity Listing Agreement. (vii) Deletion of the chapter on "Guidelines for Issue of Capital by Designated Financial Institutions (DFIs)" - SEBI had introduced separate guidelines in 1992 for primary issuances by DFIs, to place companies/corporations/institutions engaged mainly in financing of developmental activities and playing a catalytic role in the infrastructure development of the country on a different footing. Presently, DFIs operationally compete on equal footing with private entities and it is felt that DFIs, as a concept, may have outlived its utility. It has therefore been decided to remove the special dispensations given to DFIs by deleting the chapter on "Guidelines for Issue of Capital by DFIs" from SEBI (DIP) Guidelines. (viii) Monitoring of issue proceeds - Presently, as per SEBI (DIP) Guidelines, every issuer making an issue of more than ₹ 500 crores is required to appoint a monitoring a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h immediate effect. 4. This circular and the entire text of SEBI (DIP) Guidelines, including the amendments issued vide this circular, are available on SEBI website at www.sebi.gov.in under the categories "Legal Framework" and Issues and Listing. 5. All registered merchant bankers are directed to ensure compliance with the applicable amendments made vide this circular. Yours faithfully, Neelam Bhardwaj Encl.: Annexure I Annexure I Amendments to SEBI (DIP) Guidelines, 2000 Chapter I Preliminary 1. In clause 1.2.1, after sub-clause (xiib), the following sub-clause shall be inserted, namely:- "(xiic) "Fast Track Issue" means a public issue or rights issue made by a listed company which satisfies all the requirements of clause 2.1.2A." 2. In clause 1.2.1, after sub-clause (xxiva), the following sub-clause shall be inserted, namely:- "(xxivb) "Retail Individual Shareholder" means a shareholder of a listed company, who - (a) as on the record date (i.e., the date fixed for the purpose of determining eligible shareholders), is holding shares which, on the basis of the closing price of the shares as on the previous day, are worth up to ₹ 1,00,000; and (b) applies or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n this clause, the date of filing of red herring prospectus (in case of a book built issue) or prospectus (in case of a fixed price issue) with ROC; and (ii) in case of a rights issue of securities by a listed company satisfying all the requirements specified in this clause, where the aggregate value of such securities, including premium, if any, exceeds ₹ 50 lakhs, the date of filing of letter of offer with Designated Stock Exchange. (b) "Average market capitalisation of public shareholding" shall mean the sum of daily market capitalization of "public shareholding" for a period of one year up to the end of the quarter preceding the month in which the proposed issue was approved by the Board/shareholders, as the case may be, divided by the number of trading days. For this purpose, "public shareholding" shall have the same meaning as assigned to it in clause 40A of the Listing Agreement. 2.1.2A.2 A listed issuer company satisfying all the requirements specified in this clause and filing a red herring prospectus (in case of a book built issue) or prospectus (in case of a fixed price issue) with ROC or letter of offer with Designated Stock Exchange, as the case may be, shal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t track issue, inter se allocation of responsibilities (Schedule II) shall not be submitted to the Board." 11. In clause 5.3.3.1, for the word "prospectus", the words "offer document" shall be substituted. 12. Clause 5.3.3.1A shall be renumbered as "clause 5.3.3.1B" and after the words "along with the draft offer document" and before the full stop, the words "or in case of a fast track issue, along with the copy of the red herring prospectus, prospectus or letter of offer filed under clause 2.1.2A.2" shall be inserted. 13. The following shall be inserted before the renumbered clause 5.3.3.1B, namely:- "5.3.3.1A In case of a fast track issue, the lead merchant banker shall furnish a due diligence certificate to the Board as per the format specified in Schedule III, after including therein additional confirmations/certification to Schedule III, as specified in Schedule VI-A, along with the copy of the red herring prospectus, prospectus or letter of offer, as the case may be, filed under clause 2.1.2A.2." 14. In clause 5.4.1.1, after the existing proviso, the following proviso shall be inserted, namely:- "Provided further that a merchant banker who is an associate of the issuer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o a listed company satisfying all the requirements specified in clause 2.1.2A.1." (ii) in the existing 1st proviso, for the words "Provided that in case of a public issue by listed company", the words "Provided further that in case of a public issue by a listed company other than a fast track issue" shall be substituted. (iii) in the existing second proviso, for the word "aforesaid", the word "second" shall be substituted. 23. In clause 6.8.2.8, the following proviso shall be inserted, namely:- "Provided that in case of a fast track issue the inter se allocation of responsibilities shall be disclosed, notwithstanding that it was not filed with the Board. 24. In clause 6.8.3.2 (i) after sub-clause (a), the following provisos shall be inserted, namely:- "Provided that in case of a public or rights issue by a listed company, where shares had been issued under one or more employee stock option schemes, particulars of shares issued under the employee stock option schemes may be aggregated quarter-wise, indicating the aggregate number of shares issued and the price range within which shares have been issued in each quarter. Provided further that in cases falling within the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. After clause 6.10.3.2, the following Explanation shall be inserted, namely:- "Explanation - For the purposes of this clause, the term "reference date" shall have the same meaning as assigned to it in Explanation (a) to clause 2.1.2A.1." 33. In clause 6.11.1.3, after sub-clause (f), the following proviso shall be inserted, namely:- "Provided that nothing contained in this clause shall apply to an issue made by any government company, statutory authority or corporation or any special purpose vehicle set up by any of them." 34. After clause 6.12.3A, the following new clause shall be inserted, namely:- "6.12.3B Details of compliance with eligibility requirements to make a fast track issue, if applicable." 35. In sub-clause (a) of clause 6.12.4, for the words starting from "in accordance with" and ending up to the words "fulfil their underwriting commitments", the following shall be substituted, namely:- "which reads as follows (due diligence certificate submitted to the Board to be reproduced here) :" 36. For sub-clause (c) of clause 6.13.2.17, the following sub-clause shall be substituted, namely:- "(c) Instruction to applicants to disclose Permanent Account Number in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Indian Depository Receipts (IDRs) Part I - General Requirements 41. In clause 6A.3- (i) for sub-clause (4), the following shall be substituted, namely :- "4. In every issue of IDR- (i) At least 50 per cent of the IDRs issued shall be subscribed to by QIBs; (ii) The balance 50 per cent shall be available for subscription by non-institutional investors (i.e., investors other than QIBs and retail individual investors) and retail individual investors, including employees. IDRs shall be allocated among non-institutional investors, retail individual investors and employees at the discretion of the issuer. The manner of allocation shall be disclosed in the prospectus for IDRs." (ii) in sub-clause (5), for the word and figures "Rs. 2,00,000", the words and figures "Rs. 20,000" shall be substituted. Part II - Disclosures in a Prospectus for IDRs 42. In clause 6A.6, in sub-clause (i), for the words and figures "Rule 5(i)(b)", the words and figures "Rule 5(1)(ii)" shall be substituted. 43. In clause 6A.20- (i) In sub-clause (2), for the proviso, the following shall be substituted, namely :- "Provided that the gap between the date of issue and the date of report shall not b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubstituted. 50. In clause 8.5, after sub-clause (g), the following sub-clause shall be inserted, namely :- "(h) No payment in the nature of discount, commission, allowance or otherwise shall be made by the issuer or promoters, directly or indirectly, to any person who receives securities by way of firm allotment in an issue." 51. After clause 8.7.1, the following proviso shall be inserted, namely :- "Provided that in case of a fast track issue, no such further issue of capital shall be made during the period between filing of the red herring prospectus (in case of a book built issue) or prospectus (in case of a fixed price issue) with ROC or the letter of offer with Designated Stock Exchange and listing of the securities offered in the issue and/or refund of application moneys, unless full disclosures regarding the total capital proposed to be so raised are made in the offer document." 52. In clause 8.9.1, the following proviso shall be inserted, namely :- "Provided that nothing contained in this clause shall apply to a fast track issue." 53. After clause 8.17.1, the following proviso shall be inserted, namely :- "Provided that nothing contained in this clause shall apply ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11.4.1 Unless specified otherwise in this Chapter and unless the context otherwise requires, all references in this Chapter to "draft prospectus" shall be construed as having been made to "red herring prospectus", in application to fast track issues. 11.4.2 Nothing contained in sub-clause (vi) of clause 11.2 or sub-clause (viii) of clause 11.3.1 shall apply to a fast track issue." Chapter XII Guidelines for Issue of Capital by Designated Financial Institutions 61. Chapter XII shall be omitted. Chapter XII-A Shelf Prospectus 62. In sub-clause (a) of clause 12A.1, the word "debt", appearing between the words "issues of" and "securities" shall be omitted. 63. In clause 12A.2.1, the following proviso shall be inserted, namely :- "Provided that nothing contained in this clause shall apply to a fast track issue." Chapter XIII Guidelines for Preferential Issues 64. After clause 13.1B, the following clause shall be inserted, namely :- "13.1C A listed company shall not make any preferential allotment of equity shares, FCDs, PCDs or any other financial instrument which may be converted into or exchanged with equity shares at a later date unless it has obtained the Permanent Acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the activities which have been carried out until now are valid in terms of the object clause of its Memorandum of Association. 10. We confirm that necessary arrangements have been made to ensure that the moneys received pursuant to the issue are kept in a separate bank account as per the provisions of section 73(3) of the Companies Act, 1956 and that such moneys shall be released by the said bank only after permission is obtained from all the stock exchanges mentioned in the prospectus/letter of offer. We further confirm that the agreement entered into between the bankers to the issue and the issuer specifically contains this condition. 11. We certify that no payment in the nature of discount, commission, allowance or otherwise shall be made by the issuer or the promoters, directly or indirectly, to any person who receives securities by way of firm allotment in the issue. 12. We certify that a disclosure has been made in the prospectus that the investors shall be given an option to get the shares in demat or physical mode. 13. We certify that the following disclosures have been made in the draft prospectus/letter of offer : (a) An undertaking from the issuer that at a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us (in case of a fixed price issue)/letter of offer (in case of a rights issue). 3. We confirm that all the material disclosures in respect of the issuer have been made in the red herring prospectus (in case of a book built issue)/prospectus (in case of a fixed price issue)/letter of offer (in case of a rights issue) and certify that any material development in the issuer or relating to the issue up to the commencement of listing and trading of the shares offered through this issue shall be informed through public notices/advertisements in all those newspapers in which pre-issue advertisement and advertisement for opening or closure of the issue have been given. 4. We confirm that the abridged prospectus/abridged letter of offer contains all the disclosures as specified in the SEBI (Disclosure and Investor Protection) Guidelines, 2000. 5. We confirm that agreements have been entered into with both the depositories for dematerialisation of the securities of the issuer. 6. We certify that as per the requirements of 1st proviso to clause 4.9.1 of the SEBI (Disclosure and Investor Protection) Guidelines, 2000, cash flow statement has been prepared and disclosed in the red herring p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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