SEBI (ICDR) (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) (SECOND AMENDMENT) REGULATIONS, 2023
No. SEBI/LAD-NRO/GN/2023/130.—In exercise of the powers conferred under section 30 of the Securities and Exchange Board of India Act, 1992 (15 of 1992), the Board hereby makes the following regulations to further amend the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, namely: –
- These regulations may be called the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) (Second Amendment) Regulations, 2023.
- They shall come into force on the date of their publication in the Official Gazette.
- In the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, –
I. the words “Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014” wherever they appear, shall be substituted with the words “Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021”.
II. in regulation 2, in sub-regulation (1), in clause (ss), in sub-clause (ix), after the words “a pension fund with minimum corpus of twenty five crore rupees”, the words “registered with the Pension Fund Regulatory and Development Authority established under sub-section (1) of section 3 of the Pension Fund Regulatory and Development Authority Act, 2013” shall be inserted.
III. in regulation 26, in sub-regulation (1), after the words “by hosting it on the websites of” and before the words “the Board”, the words and symbol “the issuer,” shall be inserted.
IV. regulation 40 shall be substituted with the following regulation, namely:
“Underwriting
- (1) If the issuer making an initial public offer, other than through the book building process, desires to have the issue underwritten to cover under-subscription in the issue, it shall, prior to the filing of the prospectus, enter into an underwriting agreement with the merchant bankers or stock brokers registered with the Board to act as underwriters, indicating therein the maximum number of specified securities they shall subscribe to, either by themselves or by procuring subscription, at a predetermined price which shall not be less than the issue price, and shall disclose the fact of such underwriting agreement in the prospectus.
(2) The issuer making an initial public offer, other than through the book building process, shall, prior to the filing of the prospectus, enter into an underwriting agreement with the merchant bankers or stock brokers registered with the Board to act as underwriters, indicating therein the number of specified securities they shall subscribe to on account of rejection of applications, either by themselves or by procuring subscription, at a predetermined price which shall not be less than the issue price, and shall disclose the fact of such underwriting agreement in the prospectus.
(3) If the issuer makes a public issue through the book building process:
(a) the issue shall be underwritten by lead manager(s) and syndicate member(s):
Provided that at least seventy five per cent. of the net offer proposed to be compulsorily allotted to qualified institutional buyers for the purpose of compliance of the eligibility conditions specified in sub-regulation (2) of regulation 6 shall not be underwritten.
(b) the issuer shall, prior to the filing of the prospectus, enter into an underwriting agreement with the lead manager(s) and syndicate member(s), indicating therein the number of specified securities they shall subscribe to on account of rejection of bids, either by themselves or by procuring subscription, at a price which shall not be less than the issue price, and shall disclose the fact of such underwriting agreement in the prospectus.
(c) if the issuer desires to have the issue underwritten to cover under-subscription in the issue, it shall, prior to the filing of the red herring prospectus, enter into an underwriting agreement with the lead manager(s) and syndicate member(s) to act as underwriters, indicating therein the maximum number of specified securities they shall subscribe to, either by themselves or by procuring subscription, at a price which shall not be less than the issue price, and shall disclose the fact of such underwriting agreement in the red herring prospectus.
(d)if the syndicate member(s) fail to fulfil their underwriting obligations, the lead manager(s) shall fulfil the underwriting obligations.
(e) the lead manager(s) and syndicate member(s) shall not subscribe to the issue in any manner except for fulfilling their underwriting obligations.
(f) in case of every underwritten issue, the lead manager(s) shall undertake minimum underwriting obligations as specified in the Securities and Exchange Board of India (Merchant Bankers) Regulations, 1992.
(g) where the issue is required to be underwritten, the underwriting obligations should be at least to
the extent of minimum subscription.”
V. in regulation 59C, in sub-regulation (9), after the words “by hosting it on the websites of” and before the words “the Board”, the words and symbol “the issuer,” shall be inserted.
VI. in regulation 72, in sub-regulation (1), after the words “by hosting it on the websites of” and before the words “the Board”, the words and symbol “the issuer,” shall be inserted.
VII. in regulation 124, in sub-regulation (1), after the words “by hosting it on the websites of” and before the words “the Board”, the words and symbol “the issuer,” shall be inserted.
VIII. regulation 136 shall be replaced with the following regulation, namely:
“Underwriting
136. (1) If the issuer making a further public offer, other than through the book building process, desires to have the issue underwritten to cover under-subscription in the issue, it shall, prior to the filing of the prospectus, enter into an underwriting agreement with the merchant bankers or stock brokers registered with the Board to act as underwriters, indicating therein the maximum number of specified securities they shall subscribe to, either by themselves or by procuring subscription, at a predetermined price which shall not be less than the issue price, and shall disclose the fact of such underwriting agreement in the prospectus.
(2) The issuer making a further public offer, other than through the book building process, shall,
prior to the filing of the prospectus, enter into an underwriting agreement with the merchant bankers or stock brokers registered with the Board to act as underwriters, indicating therein the number of specified securities they shall subscribe to on account of rejection of applications, either by themselves or by procuring subscription, at a predetermined price which shall not be less than the issue price, and shall disclose the fact of such underwriting agreement in the prospectus.
(3) If the issuer makes a public issue through the book building process:
(a) the issue shall be underwritten by lead manager(s) and syndicate member(s):
Provided that at least seventy five per cent. of the net offer proposed to be compulsorily allotted to qualified institutional buyers for the purpose of compliance of the eligibility conditions specified in sub-regulation (2) of regulation 103 shall not be underwritten.
(b) the issuer shall, prior to the filing of the prospectus, enter into an underwriting agreement with the lead manager(s) and syndicate member(s), indicating therein the number of specified securities they shall subscribe to on account of rejection of bids, either by themselves or by procuring subscription, at a price which shall not be less than the issue price, and shall disclose the fact of such underwriting agreement in the prospectus.
(c) if the issuer desires to have the issue underwritten to cover under-subscription in the issue, it shall, prior to the filing of the red herring prospectus, enter into an underwriting agreement with the lead manager(s) and syndicate member(s) to act as underwriters, indicating therein the maximum number of specified securities they shall subscribe to, either by themselves or by procuring subscription, at a price which shall not be less than the issue price, and shall disclose the fact of such underwriting agreement in the red herring prospectus.
(d)if the syndicate member(s) fail to fulfil their underwriting obligations, the lead manager(s) shall fulfil the underwriting obligations.
(e) the lead manager(s) and syndicate member(s) shall not subscribe to the issue in any manner except for fulfilling their underwriting obligations.
(f) in case of every underwritten issue, the lead manager(s) shall undertake minimum underwriting obligations as specified in the Securities and Exchange Board of India (Merchant Bankers) Regulations, 1992.
(g) where the issue is required to be underwritten, the underwriting obligations should be at least to the extent of minimum subscription.”
IX. in regulation 187, in sub-regulation (1), after the words “by hosting it on the websites of” and before the words “the Board”, the words and symbol “the issuer,” shall be inserted.
X. in regulation 246, in sub-regulation (4), after the words “on the websites of” and before the words “the Board”, the words and symbol “the issuer,” shall be inserted.
XI. in regulation 293,
(i) after the words “issuer shall be eligible to” and before the words and symbol “issue bonus shares to its members if:”, the words “announce its bonus issue and” shall be inserted.
(ii) after clause (a), the following clause shall be inserted namely:
“(aa) it has received approval from the stock exchanges for listing and trading of all the securities, excluding options granted to employees pursuant to an employee stock option scheme and convertibles securities, issued by the issuer prior to the issuance of bonus shares.”
XII. in regulation 294, after clause (5), the following clause shall be inserted namely:
“(6) The allotment of shares in a bonus issue shall be made only in the dematerialised form.”
XIII. in Schedule VI,
(i) in Part-A,
(a) in clause 10, sub-clause (A) shall be substituted with the following, namely:
“(A) Industry Overview
If extract of any industry report is disclosed in the offer document, the complete industry report shall be provided as part of the material documents.”
(b) in clause 18, in sub-clause (3), the following proviso shall be inserted, namely:
“Provided that the material contracts and material documents shall also be made available for inspection through online means”
(ii) in Part B, in clause XXIII, in sub-clause (B), the following proviso shall be inserted, namely:
“Provided that the material contracts shall also be made available for inspection through online means.”
(iii) in Part-B-1,
(a) in clause 11, sub-clause (A) shall be replaced with the following, namely:
“(A) Industry Overview
If extract of any industry report is disclosed in the offer document, the complete industry report shall be provided as part of the material documents.”
(b) in clause 22, in sub-clause (B), the following proviso shall be inserted, namely:
“Provided that the material contracts shall also be made available for inspection through online means.”
XIV. in Schedule XIII, in Part A,
(i) in clause 3, in sub-clause (b), after the words “prior to filing of the prospectus”, the words “or the red herring prospectus, as the case may be” shall be inserted.
(ii) in clause 3, in sub-clause (c), after the words “printed in the prospectus” and before the words “before it is filed with the Registrar of Companies”, the words “or the red herring prospectus, as the case may be” shall be inserted.
(iii) in clause 10, in sub-clause (k),
(a) after the words “corporate bodies and family offices” and before the words “which are associate of the lead manager”, the words “sponsored by the entities” shall be deleted.
(b) before symbol and word “)nor”, the words “or pension funds sponsored by entities which are associate of the lead manager” shall be inserted.
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