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SEBI rationalises norms to speed up rights issues
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SME Times News Bureau | 24 Sep, 2020
In a bid to make fundraising through rights issues faster and cost
effective, the Securities and Exchange Board of India (SEBI) on
Wednesday rationalised norms and the eligibility criteria and
regulations for such issues.
Post the amendments, the issuer
shall be eligible to make truncated disclosures in terms of "where it
has been filing periodic reports/statements/information in compliance
with Listing Regulations as applicable" for the last one year, instead
of the last three years as required earlier and also regarding "where
three years have passed after change in management pursuant to
acquisition of control or Listing consequent to a scheme of
arrangement".
"SEBI has decided to amend SEBI (Issue of Capital
and Disclosure Requirements) Regulations, 2018 to rationalise
eligibility criteria and disclosure requirements for Rights Issues' with
an objective to make the fund raising through this route easier, faster
and cost-effective," a SEBI statement said.
The SEBI has also
increased the threshold, from Rs 10 crore to Rs 50 crore, for filing
requirement of rights issue draft letter of offer with the Board for its
observations.
In another relief, the regulator has decided that
"mandatory 90 per cent minimum subscription criteria for rights issue
shall not be applicable to those issuers where object of the issue
involves financing other than financing of capital expenditure for a
project, provided that the promoters and promoter group of the issuer
undertake to subscribe fully to their portion of rights entitlement".
The
issuer shall be eligible to make Fast Track Rights Issue, in case of
pending show-cause notices in respect to adjudication, prosecution
proceedings and audit qualification, provided that necessary disclosures
along with potential adverse impact on the issuer are made in the
letter of offer, the SEBI said.
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