The Securities and Exchange Board of India on 6th August 2021 has approved some major amendments to the existing securities laws, some of the decisions are discussed below:
The Board has approved the merger of SEBI (Issue of Sweat Equity) Regulations, 2002 (“Sweat Equity Regulations”) and SEBI (Share Based Employee Benefits)Regulations, 2014 (“SBEB Regulations”) into a single regulation called the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021.
The Board has granted relaxation in lock-in requirements as follows:
The lock-in of promoter shareholding to the extent of minimum promoter contribution (i.e., 20% of post issue capital) shall be for a period of 18 months from the date of allotment in IPO/ FPO instead of existing 3 years and promoter shareholding in excess of minimum promoter contribution shall be locked-in for a period of 6 months instead of existing 1 year, in the following cases:
a. Object of the issue is only offer for sale (OFS)
b. Object of the issue is only raising of funds for other than for capital expenditure for a project (more than 50% of the fresh issue size)
c. In case of combined offering (fresh Issue + offer for sale), the object of the issue involves financing for other than capital expenditure for a project (more than 50% of the issue size excluding OFS portion)
The definition of promoter group shall be rationalized, in case where the promoter of the issuer company is corporate body, to exclude companies having common financial investors.
The disclosure requirements in the offer documents, in respect of Group Companies of the issuer company, shall be rationalized to, inter-alia, exclude disclosure of financials of top 5 listed/unlisted group companies. These disclosures will continue to be made available on the website of the group companies.
Further, the Board has approved amendments to SEBI (AIF) Regulations, 2012 to provide investment flexibility and streamline regulatory processes.
The Board considered and approved the proposals relating to SEBI (LODR) Regulations, 2015 pertaining to issuers who have listed Non-Convertible Debt Securities, Non- Convertible Redeemable Preference Shares, Perpetual Debt Instruments and/ or Perpetual Non-Cumulative Preference Shares.
