Tendering of shares in open offers, buybacks and delisting offers

Tendering of shares in open offers, buybacks and delisting offers by marking lien in the demat account of the shareholders.

1. SEBI, vide Circular No. CIR/CFD/POLICY CELL/1/2015, dated April 13, 2015 provided the mechanism for acquisition of shares through stock exchange mechanism pursuant to tender offers for the purpose of takeovers, buy back and delisting of securities. Subsequently, SEBI vide Circular dated CFD/DCR2/CIR/P/2016/131, dated December 09, 2016 streamlined the process for acquisition of shares pursuant to tender offers made pursuant toopen offers, buy back offers and delisting of securities.
   
2. Under the existing mechanism, the shares tendered by the shareholders are required to be directly transferred to the account maintained by the clearing corporation and different tendering processes are being adopted by Depositories. Such transfer involves systematic risk,substantial time and cost.
   
3. In consultation with Depositories, Clearing Corporations and Stock Exchanges, it has been decided that a lien shall be marked against the shares of the shareholders participating in the tender offers. Upon finalization of the entitlement, only accepted quantity of shares shall be debited from the demat account of the shareholders.The lien marked against unaccepted shares shall be released. The detailed procedurefor tendering and settlement of shares under the revised mechanism is specified in the Annexure. All other procedures shall remain unchanged.
   
4. The aforesaid measures reduce the systematic risk and risks associated with the movement of securities from the demat account of shareholdersto Clearing Corporation account and vice-versa and make theprocess more investor friendly.
   
5. The said revised mechanism shall be applicable to all the tender offers for which Public Announcement is made on or after October 15,2021.
   
6. Stock Exchanges and Depositories shall take necessary steps andputin place necessary infrastructure and systems for implementation of the mechanism and ensure compliance with the provisions of this Circular.
   
7. This Circular is being issued in exercise of the powers conferred under section 11(1) of the Securities and Exchange Board of India Act, 1992 read with regulation 18(6A) of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, regulation 9(iii) of SEBI (Buy-back of Securities) Regulations, 2018 and regulation 17(2) and regulation 18 of SEBI (Delisting of Equity Shares) Regulations, 2021.

Circular

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