The Securities and Exchange Board of India vide its notification dated 2nd September 2020 has decided that the disclosure specified under Regulation 29(4) of Takeover Regulations, in relation to shares encumbered with TM /CM as collateral from clients for margin obligation in the ordinary course of stockbroking business are dispensed with.
Under the takeover norms, shares taken by way of encumbrance is treated as an acquisition, while shares given upon release of encumbrance is treated as a disposal. Disclosures are required to be made in this regard by the entity concerned, however after receiving representations from market participants, it has now been decided that the entities shall not be required to make disclosures about shares encumbered with trading and clearing members by way of pledge or re-pledge in the depository system as part of improving the ease of doing business.
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