**Summary:**
This SEBI circular, reference number SEBI/HO/CFD/DIL2/CIR/P/2021/633, dated October 1, 2021, announces a further extension of certain relaxations relating to procedural matters concerning Issues and Listing regulations. Specifically, it extends the relaxation mentioned in point iv of SEBI Circular No. SEBI/HO/CFD/DIL2/CIR/P/2020/78 dated May 6, 2020, to Rights Issues opening up to March 31, 2022. This relaxation is contingent upon the issuer and Lead Managers continuing to comply with point v of the aforementioned circular dated May 6, 2020.
Furthermore, the circular mandates that Issuer Companies conduct a Vulnerability Test, performed by an independent IT Auditor, for the optional non-cash mode mechanism used to accept applications in Rights Issues via the Registrar and Transfer Agent (RTA) facility. The resulting report must be submitted to the Stock Exchanges. This requirement, along with compliance requirements outlined in points iv and v of the May 6, 2020 circular and para 5 of the April 22, 2021 circular (SEBI/HO/CFD/DIL2/CIR/P/2021/552), places responsibility on the issuer, Lead Managers, Registrar, and other incorporated intermediaries to ensure compliance within the mechanism.
This circular is issued under the authority of Section 11(1) and 11A of the Securities and Exchange Board of India Act, 1992, and Regulations 299 and 300 of the SEBI Issue of Capital and Disclosure Requirements Regulations, 2018. The purpose is to protect investor interests, promote development, and regulate the securities market.
The circular is addressed to Registered Merchant Bankers, Recognized Stock Exchanges, Registered Registrars to an Issue, Self Certified Syndicate Banks, Listed Entities, and entities proposing to list specified securities. The circular is available on the SEBI website (www.sebi.gov.in) under the "Legal Framework-Circulars" category. For further information, contact Vandana Joglekar, Deputy General Manager, Corporation Finance Department, at vandanaj@sebi.gov.in.
Key Entities Referenced
Securities and Exchange Board of India (SEBI): Regulatory body for the securities market in India, responsible for protecting investor interests and promoting market development.
SEBI Issue of Capital and Disclosure Requirements Regulations, 2018: Regulations pertaining to the issuance of capital and disclosure requirements for companies in India.
Rights Issue: An offering of securities to existing shareholders, granting them the right to purchase additional shares.
Merchant Bankers: Financial institutions that underwrite securities for corporations or municipalities.
Stock Exchanges: Organized marketplaces where securities are bought and sold.
Self Certified Syndicate Banks: Banks authorized to act as underwriters in public offerings.
Registrars to an Issue: Entities responsible for maintaining records of security ownership and processing transactions related to securities offerings.
Vandana Joglekar: Deputy General Manager, Corporation Finance Department at SEBI, the signatory of the circular.
CIRCULAR
SEBI/HO/CFD/DIL2/CIR/P/2021/633 Oct 01, 2021
To
All Registered Merchant Bankers
All Recognized Stock Exchanges
All Registered Registrars to an Issue
All Self Certified Syndicate Banks
All listed entities
All entities who propose to list the specified securities
Dear Sir/Madam,
Sub: Relaxations relating to procedural matters –Issues and Listing.
1. SEBI vide Circular no. SEBI/HO/CFD/DIL2/CIR/P/2020/78 dated May 6, 2020, granted
one time relaxations from strict enforcement of certain regulations of SEBI (Issue of Capital
and Disclosure Requirements) Regulations, 2018, pertaining to Rights Issue opening upto
July 31, 2020.
2. Based on the representations received from the market participants, the validity of
these relaxations was further extended for Rights Issues opening up to December 31,
2020, vide SEBI Circular No. SEBI/HO/CFD/DIL1/CIR/P/2020/136 dated July 24, 2020.
3. The relaxation mentioned in point (iv) of the said SEBI Circular dated May 6, 2020, was
further extended vide SEBI Circular No. SEBI/HO/CFD/DIL1/CIR/P/2021/13 dated
January 19, 2021, for Rights Issues opening up to March 31, 2021. This was further
extended for Rights Issues opening up to September 30, 2021, vide SEBI Circular No.
SEBI/HO/CFD/DIL2/CIR/P/2021/552 dated April 22, 2021.
4. To ease and facilitate investors, the relaxation mentioned in point (iv) of the said SEBI
Circular dated May 6, 2020, is further extended and shall be applicable for Rights Issues
opening up to March 31, 2022, provided that the issuer along with the Lead Manager(s)
shall continue to comply with point (v) of the said SEBI Circular dated May 06, 2020.
5. With respect to mechanism and compliance requirements at point (iv) and (v) of the said
SEBI Circular dated May 6, 2020, and para 5 of the said SEBI Circular dated April 22,
2021, the issuer along with Lead Manager(s), Registrar, and other recognized
intermediaries (as incorporated in the mechanism) shall also ensure the following:
a. Issuer Company shall conduct a Vulnerability Test for optional mechanism (non-
cash mode only) 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).
6. This circular is issued in exercise of powers conferred by Section 11(1) read with Section
11A of the Securities and Exchange Board of India Act, 1992 read with Regulations 299
Page 1 of 2and 300 of the Securities and Exchange Board of India (Issue of Capital and Disclosure
Requirements) Regulations, 2018, to protect the interests of investors in securities and to
promote the development of, and to regulate the securities market.
7. A copy of this circular is available on SEBI website at www.sebi.gov.in under the categories
“Legal Framework/Circulars”.
Yours faithfully,
Vandana Joglekar
Deputy General Manager
Corporation Finance Department
vandanaj@sebi.gov.in
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