Market regulator Securities and Exchange Board of India (SEBI) on November 16 issued consultation paper seeking more monitoring on how new age tech firms are using funds for acquisitions.
Apart from this, SEBI also sought comments whether additional disclosures on fund utilisation is needed or if the market regulator needs longer lock in for anchor investors.
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"These amendments are aimed at ensuring that the recognised stock exchanges refer draft schemes to Sebi only upon being fully convinced that the listed entity is in compliance with Sebi Act, Rules, Regulations and circulars," Sebi said in a circular.
The listed entity is required to submit certain documents to the exchange, which includes a valuation report. As per the revised guidelines, this report needs to be accompanied by an undertaking from the listed entity, stating that no material event impacting the valuation has occurred during the intervening period of filing the scheme documents with exchange and period under consideration for valuation.
Besides, the entities now also need to submit a declaration on any past defaults of listed debt obligations of the entities forming part of the scheme. In addition, a no-objection certificate from the lending scheduled commercial banks/financial institutions is also required to be submitted.
"The fractional entitlements, if any, shall be aggregated and held by the trust, nominated by the Board in that behalf, who shall sell such shares in the market at such price, within a period of 90 days from the date of allotment of shares, as per the draft scheme submitted to Sebi," the regulator said. The listed company has to submit a report from its audit committee and the independent directors certifying that the listed entity has compensated the eligible shareholders.
Both the reports shall be submitted within 7 days of compensating the shareholders. Sebi has also asked the exchange to ensure compliance with the guidelines and the non-compliance, if any, has to be submitted to the regulator on a quarterly basis.
Any misstatement or furnishing of false information will make the listed entity liable for punitive action. The guidelines will be applicable for all the schemes filed with the stock exchanges from the date of the circular.
There are certain requirements that need to be fulfilled before the scheme of arrangement is submitted for sanction by the National Company Law Tribunal. This includes that listed entities choose one of the stock exchanges having nationwide trading terminals as the designated Stock Exchange to coordinate with Sebi.
In a separate circular, Sebi changed the address for applicants of regulatory sandbox to send the applications. The applications now have to be sent to the Market Intermediaries Regulation and Supervision Department, at the address given by Sebi. The application can also be sent through email.
The applicant shall ensure that the specified eligibility criteria are satisfied while submitting the application to Sebi, in the format specified by the regulator. The application form shall be signed by the Chief Executive Officer (CEO) of the applicant or an officer duly authorised by the CEO or compliance officer.
With inputs from PTI
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