ICDR regulations amndmnts

SEBI has vide its notification dated 8th January, 2021 amended the SEBI (Issue of Capital and Disclosure Requirements), Regulations to the following extent.

Regulation 112 which pertains to requirement of minimum promoters’ contributions not required in certain cases. Regulation 112(b) has been amended as follows:

“(b) where the equity shares of the issuer are frequently traded on a stock exchange for a period of at least three years immediately preceding the reference date, and:
(i) the issuer has redressed at least ninety five per cent of the complaints received from the investors till the end of the quarter immediately preceding the month of the reference date, and;
(ii) the issuer has been in compliance with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 for a minimum period of three years 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:
Provided further that where the promoters propose to subscribe to the specified securities offered to the extent greater than higher of the two options available in clause (a) of sub-regulation (1) of regulation 113, the
subscription in excess of such percentage shall be made at a price determined in terms of the provisions of regulation 164 or the issue price, whichever is higher.”

The earlier clause was that the equity shares of the issuer are frequently traded on the stock exchange for at least 3 years and the issuer has a dividend paying track record for at least 3 years. The earlier proviso was silent regarding the composition of the board of directors.

The proviso after regulation 115(c) has been omitted. Regulation 115 pertains to lock in of specified securities of promoters.

The proviso said as follows in its earlier avatar.

Provided that the excess promoters’ contribution as provided in the proviso to clause (b) of regulation 112 shall not be subject to lock-in.

Since the proviso to regulation 112(b) has been amended, therefore this proviso has been omitted.

A new proviso has been added to regulation 167(4) – regulation 167 pertains to lock in of specified securities of the promoters or promoter group. Regulation 167 pertains to Chapter V which is Preferential Issue.

The proviso is as follows:

“Provided that the lock-in provision shall not be applicable to the specified securities to the extent to achieve 10% public shareholding.”

https://www.sebi.gov.in/legal/regulations/jan-2021/securities-and-exchange-board-of-india-issue-of-capital-and-disclosure-requirements-amendment-regulations-2021_48704.html

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