In order to further simplify the process for public issue of equity shares and convertibles, the Securities and Exchange Board of India (“SEBI”) issued a circular on November 10, 2015 (“Listing Circular”) which includes reduction of the time for listing securities, after the closure of the public issue has occurred. From the present requirement of 12 (twelve) working days, the time for listing of securities has been limited to 6 (six) working days. The Listing Circular will be made applicable to all public issues opening on or after January 1, 2016. Some of the key features of the Listing Circular are summarised below:
- Investors participating in a public issue will only be permitted to use the ‘Application Supported by Blocked Amount’ facility for making payments, by writing their bank account numbers and authorizing the banks to make payments in case of allotments, on signing the application forms;
- Stock exchanges are to develop systems on their websites, by which investors will be enabled to view the status of their public issue applications and will also enable the stock exchanges to send alerts and details of applications and allotments to the investors;
- Registrars to an issue and Share Transfer Agents (“RTA”) and Depository Participants (“DP”) registered with SEBI will be permitted to accept public issue related application forms;
- The Listing Circular includes annexures providing indicative timelines and instructions for the issuer / intermediaries / stock exchanges / merchant bankers / registrar relating to the compliance of various activities for the public issue of securities and the prescribe format for submitting details, by RTAs and DPs.
The Listing Circular looks to reduce timelines for listing of securities to benefit all stakeholders. It will endeavor to allow a much smoother process for investors to participate in public issues and will encourage intermediaries to coordinate their activities to complete listing procedures within the prescribed timeline. In this regard, necessary amendments to the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 have already been notified.