SEBI relaxed the rules on pricing of preferential issues for issues between July and December 31, 2020, at its board meet
The Securities and Exchange Board of India (SEBI) on June 25 announced revisions to various regulations related to pricing norms for preferential share issue, insider trading, among others following its board meeting.
Here are some of the key outcomes of the board meeting:> The board will provide an additional option to the existing pricing methodology for preferential issuance.
- In case of frequently traded shares, SEBI said the price of a preferential issue should not be less than the average of weekly high and low of the volume-weighted average price during twelve or two weeks preceding the relevant date.
- The specified securities allotted on a preferential basis using the above pricing formula shall be locked-in for a period of three years, it added.
- Acquisition through stock exchange settlement process through bulk and/or block deals shall be permitted during the open offer.
- For indirect acquisitions where the public announcement of an open offer has been made, 100 percent of the consideration payable under the open offer must be deposited in an escrow account.
- In case of delays in making open offer due to acts of omission or commission of the acquirer, a 10 interest to be paid to all shareholders who have tendered the shares in the open offer.
- These include maintaining a structured digital database containing the nature of unpublished price sensitive information and the names of persons who have shared the information.- This will involve the automation of the process of filing disclosures to stock exchanges, restriction on the trading window not to be made applicable for transactions as prescribed by SEBI and includes entities to file the non-compliances of Code of Conduct with the stock exchanges.