The Securities and Exchange Board of India on 1st October 2021 has further extended the relaxations granted to companies with regard to compliance with procedural norms on rights issues opening till March 31, 2022.
In terms of Regulation 76 of the ICDR Regulations, an application for a rights issue shall be made only through ASBA facility. In view of the difficulties faced due to the COVID-19 pandemic and the lockdown measures, and in order to ensure that all eligible shareholders are able to apply to rights issue during such times, the issuer shall along with lead manager(s)to the issue, the registrar, and other recognized intermediaries institute an optional mechanism(non-cash mode only)to accept the applications of the shareholders subject to ensuring that no third party payments shall be allowed in respect of any application.
This relaxation has now been further extended and shall be applicable for rights issues opening up to March 31, 2022.
Further the Issuer Company shall conduct a Vulnerability Test for optional mechanism, provided to accept the applications in Rights Issue (facility provided by RTA), from an independent IT Auditor, and submit the report to Stock Exchange(s).
