The Securities and Exchange Board of India vide its notification dated 8th January 2020 has published the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) (Amendment) Regulations, 2021 to further amend the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018.
The Amendment is brought under regulation 112 which specifies the cases in which the promoters contribution is not required.
Therefore under the amended clause, the requirements of minimum promoters’ contribution shall not apply in case where the equity shares of the issuer are frequently traded on a stock exchange for a period of at least 3 years immediately preceding the reference date, and the issuer has redressed at least 95% of the complaints received from the investors till the end of the quarter immediately preceding the month of the reference date.
Further the requirement shall not apply in case where the issuer has been in compliance with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 for a minimum period of 3years immediately preceding the reference date, Provided that if the issuer has not complied with the provisions of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, relating to composition of board of directors, for any quarter during the last three years immediately preceding the date of filing of draft offer document/offer document, but is compliant with such provisions at the time of filing of draft offer document/offer document, and adequate disclosures are made in the offer document about such non-compliances during the three years immediately preceding the date of filing the draft offer document/offer document, it shall be deemed as compliance with the condition.
The Amendment brings in a new proviso under regulation 167 which deals with lock-In and restriction on transferability in which the equity shares issued on a preferential basis pursuant to any resolution of stressed assets under a framework specified by the Reserve Bank of India or a resolution plan approved by the National Company Law Tribunal under the Insolvency and Bankruptcy Code 2016, shall be locked-in for a period of one year from the trading approval
Provided that the lock-in provision shall not be applicable to the specified securities to the extent to achieve 10% public shareholding.
