Tag Archives: SEBI

T+1 rolling settlement

SEBI circular dated 7th September, 2021 allowing introduction of T+1 rolling settlement on optional basis by the stock exchanges. Some pre-conditions have been specified. This will come into effect from 1st January, 2022.

https://www.sebi.gov.in/legal/circulars/sep-2021/introduction-of-t-1-rolling-settlement-on-an-optional-basis_52462.html

Introduction of T+1 rolling settlement on an optional basis

  1. SEBI, vide circular no. SMD/POLICY/Cir – /03 dated February 6, 2003, shortened the settlement cycle from T+3 rolling settlement to T+2 w.e.f. April 01, 2003.
  2. SEBI has been receiving request from various stakeholders to further shorten the settlement cycle. Based on discussions with Market Infrastructure Institutions (Stock Exchanges, Clearing Corporations and Depositories), it has been decided to provide flexibility to Stock Exchanges to offer either T+1 or T+2 settlement cycle.
  3. Accordingly, a Stock Exchange may choose to offer T+1 settlement cycle on any of the scrips, after giving an advance notice of at least one month, regarding change in the settlement cycle, to all stakeholders, including the public at large, and also disseminating the same on its website.
  4. After opting for T+1 settlement cycle for a scrip, the Stock Exchange shall have to mandatorily continue with the same for a minimum period of 6 months. Thereafter, in case, the Stock Exchange intends to switch back to T+2 settlement cycle, it shall do so by giving 1-month advance notice to the market.
  5. Any subsequent switch (from T+1 to T+2 or vice versa) shall be subject to minimum period and notice period as mentioned in Para 4 above.
  6. There shall be no netting between T+1 and T+2 settlements.
  7. The settlement option for security shall be applicable to all types of transactions in the security on that Stock Exchange. For example, if a security is placed under T+1 settlement on a Stock Exchange, the regular market deals as well as block deals will follow the T+1 settlement cycle on that Stock Exchange.
  8. The provisions of this circular shall come into force with effect from January 01, 2022.

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regulatory framework for promoters

Gist of decisions taken at the SEBI board meeting held on 6th August, 2021

  1. The Board decided to relax the lock-in requirements as follows:
    i. The lock-in of promoters shareholding to the extent of minimum promoters contribution (i.e. 20% of post issue capital) shall be for a period of eighteen months from the date of allotment in initial public offering (IPO)/further public offering (FPO) instead of existing three years, in the following cases:
    a) If the object of the issue involves only offer for sale
    b) If the object of the issue involves only raising of funds for other than for capital expenditure for a project (more than 50% of the fresh issue size)
    c) In case of combined offering (Fresh Issue + offer for sale), the object of the issue involves financing for other than capital expenditure for a project (more than 50% of the issue size excluding OFS portion)
    Further, in all the above mentioned cases, the promoter shareholding in excess of minimum promoter contribution shall be locked-in for a period of six months instead of existing one year.
    ii. The lock-in of pre-IPO securities held by persons other than promoters shall be locked-in for a period of 6 months from the date of allotment in IPO instead of existing 1 year. The period of holding of equity shares for Venture Capital Fund or Alternative Investment Fund (AIF) of category I or Category II or a Foreign Venture Capital Investor shall be reduced to 6 months from the date of their acquisition of such equity shares instead of existing 1 year.
    A SEBI consultation paper dated May 11, 2021 had provided detailed rationale for the reduction in lock-in period such as demonstration of skin in the game by promoters, existence of private equity firms and AIFs several years before proposing listing, much less greenfield financing through IPOs, etc.
  2. The Board further decided to approve the following measures to reduce the disclosure requirements at the time of IPO:
    i. The definition of promoter group shall be rationalized, in case where the promoter of the issuer company is corporate body, to exclude companies having common financial investors.
    ii. The disclosure requirements in the offer documents, in respect of Group Companies of the issuer company, shall be rationalized to, inter-alia, exclude disclosure of financials of top 5 listed/unlisted group companies. These disclosures will continue to be made available on the website of the group companies.
  3. The Board also agreed in-principle to the proposal for shifting from the concept of promoter to ‘person in control’ or ‘controlling shareholders’ in a smooth, progressive and holistic manner. To this effect, the Board, advised SEBI to:
    a) engage with other regulators to ascertain and resolve regulatory hurdles, if any.
    b) prepare draft amendments to securities market regulations and analyse impact of the same.
    c) further deliberate at the PMAC and develop a roadmap for implementation of the proposed transition.
    The Board noted that investor landscape is now changing, with private equity and institutional investors holding significant shareholding in listed companies. In recent years, number of businesses and new age companies with diversified shareholding and professional management that are coming into the listed space are non-family owned and/or do not have a distinctly identifiable promoter group. Further, there is increasing focus on better corporate governance with responsibilities and liabilities shifting to the board of directors and management.
    The SEBI consultation paper dated May 11, 2021 captures in detail the drivers for revisiting the concept of promoter

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share based employee benefits & sweat equity

SEBI press release dated 6th August, 2021 wherein they are merging two regulations viz. Issue of Sweat Equity and Share Based Employee Benefits into one viz. Share Based Employee Benefits and Sweat Equity Regulations 2021.

Further, read on………..

The Board approved the merger of SEBI (Issue of Sweat Equity) Regulations, 2002 (“Sweat Equity Regulations”) and SEBI (Share Based Employee Benefits) Regulations, 2014 (“SBEB Regulations”) into a single regulation called the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021. While approving the said merger, the Board also agreed to certain amendments to existing provisions. Some of the key proposals approved by the Board are as follows:

  1. The companies will be allowed to provide share based employee benefits to employees, who are exclusively working for such company or any of its group companies including its subsidiary or its associate.
  2. The companies will have flexibility in switching the administration of their schemes from the trust route to the direct route and vice versa with the approval of the shareholders, subject to the condition that the switch is not
    prejudicial to the interest of the employees.
  3. The time period for appropriating the unappropriated inventory of the trust has been extended from existing 1 year to 2 years subject to the approval of the Compensation/Nomination and Remuneration Committee for such extension.
  4. It has been decided to dispense with the minimum vesting period and lockin period for all share benefit schemes in the event of death or permanent incapacity (as defined by the company) of an employee.
  5. Maximum yearly limit of sweat equity shares that can be issued by a company listed on the main board has been prescribed at 15% of the existing paid up equity share capital within the overall limit not exceeding 25% of the
    paid-up capital at any time. Further, in case of companies listed on the Innovators Growth Platform (“IGP”), the yearly limit will be 15% and overall limit shall be 50% of the paid-up capital at any time. This enhanced overall limit for IGP shall be applicable for 10 years from the date of company’s incorporation.

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schemes filed by AMCs – timelines

SEBI circular dated 23rd July, 2021 wherein they have specified that if SEBI does not suggest modification or review in any scheme documents filed by mutual funds, within 21 days, then it will be deemed as approved. Read on .

In order to promote ease of doing business and bring uniformity in the timelines for processing of scheme related applications filed by AMCs, the following has been decided:

  1. The application filed by AMCs for the following matters may be deemed to be taken on record in case no modifications are suggested or no queries are raised by SEBI within 21 working days:
     Change in the Fundamental Attributes of a scheme
     Merger/Consolidation of Schemes
     Rollover of Close-ended schemes
     Conversion of Close-ended scheme to Open ended scheme
  2. In respect of applications filed by AMCs under Regulation 24 (b) of SEBI (Mutual Funds) Regulations, 1996, no objection will have been deemed to be communicated in case no modifications are suggested or no queries are raised by SEBI within 21 working days.
  3. The timelines mentioned at para 1 and 2 above shall generally be adhered to (a) provided the application is complete in all respects and in compliance with all the relevant Regulations and circulars issued by SEBI. (b) except in cases where subject matter of approval requires a policy view to be taken or presents a unique situation which requires wider
    consultation and deliberation.
  4. The circular shall be applicable for all the applications received on or after September 01, 2021.

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inter operable platform for MF investors

SEBI has vide its circular dated 26th July, 2021 mandated the setting up of an inter operable platform for the mutual fund investors, where in one site they are able to view everything related to their mutual fund investments as well carry out transactions therein, instead of navigating to multiple sites. Salient features are :

  1. RTAs shall implement standardized practices, system interoperability amongst themselves to jointly develop a common industry wide platform that will deliver an integrated, harmonized, elevated experience to the investors across the
    industry. AMCs and Depositories shall facilitate the RTAs for development of the proposed platform.
  2. The aforesaid platform shall, inter alia in phases, enable a user-friendly interface for investors for execution of mutual fund transactions viz. purchase, redemption, switch etc., initiation and tracking of service requests viz. change of email id / contact number / bank account details etc., initiation and tracking of queries and complaints, access investment related reports viz. mutual fund holdings (both in demat and standard Statement of Account), transactions reports (including historic transactions), capital gains/loss report, details of unclaimed dividend/redemption etc. Through this platform, investors will be able to access these services for all Mutual Funds in an integrated manner. In this regard,
    AMCs, RTAs and Depositories shall take necessary measures to provide data via APIs on a real time basis to the proposed platform. Additionally, RTAs and Depositories shall also share their respective data feeds between themselves for generation of investment related reports.
  3. The platform may also over time, provide services to the distributors, registered investment advisors, AMCs, Stock Exchange platforms and digital platforms for transacting in mutual funds to further augment ease of investing and servicing of investors through the above stakeholders in consultation with SEBI.
  4. AMCs, RTAs and Depositories shall review and agree to harmonize the processes across the industry to provide a single-window, integrated, simplified investment and service experience for the investors.
  5. AMCs, RTAs, and Depositories shall adopt the data definitions and standards as provided / recommended by SEBI for data exchange amongst various participants.
  6. The Platform should be scalable with robust cyber security protocols and supported through an API-based architecture. In this regard, the platform shall adopt the Cyber Security and Cyber Resilience framework specified by SEBI from time to time to “MIIs” (Market Infrastructure Institutions such as Stock Exchanges, Depositories and Clearing Corporations) and “Qualified RTAs” (QRTAs). Further, on request basis, APIs could be exposed to other industry
    stakeholders such as distributors, registered investment advisors, Stock Exchange platforms and digital platforms etc. with due approval of the concerned Mutual Fund on mutually agreed terms.
  7. The RTAs are jointly and severally responsible for compliance with all the applicable regulations including system audit and cyber security audit. Further, RTAs shall ensure that the platform complies with the guidelines for Business
    Continuity Plan (BCP) and Disaster Recovery (DR) specified by SEBI from time to time to “MIIs”.
  8. All the stakeholders are advised to collaborate and work together towards the development and implementation of the proposed investor-friendly platform.
  9. AMCs and Depositories shall facilitate and RTAs shall make the aforesaid platform operational in a phased manner (starting with non-financial transactions) and shall be fully operational by December 31, 2021.
  10. AMCs, RTAs, Depositories, AMFI and key stakeholders are advised to create awareness about this initiative amongst the investors.
  11. Any RTA providing its services to Mutual Fund(s), subsequent to issuance of this circular, shall follow the guidelines specified in this circular or amendments thereto as may be intimated by SEBI from time to time.

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investment advisors

SEBI has brought in a concept of an Investment Advisor Administration and Supervisory Body which will regulate the registered investment advisors in the country under the SEBI (Investment Advisors) Regulations. For that purpose they have granted recognition to BSE Administration & Supervision Limited as an Investment Advisor Supervisory Body. This body i.e. BASL, shall have the following responsibilities, viz.

i. Supervision of IAs including both on-site and offsite
ii. Grievance redressal of clients and IAs
iii. Administrative action including issuing warning and referring to SEBI for enforcement action
iv. Monitoring activities of IAs by obtaining periodical reports
v. Submission of periodical reports to SEBI
vi. Maintenance of database of IAs

SEBI shall also concurrently administer and supervise the RIAs (registered investment advisors) and shall be subject to periodic inspection by SEBI. So there will be a dual supervisor body for RIAs going forward.

Pursuant to this grant of recognition to BASL, all RIAs are required to ensure compliance with the following:
i. Membership of IAASB – they have to take membership of BASL within 3 months of the recognition of BASL, which has been recognized from 1st June, 2021. So all RIAs have to perforce take membership of BASL by end August, 2021
ii. Payment of fees: All RIAs have to pay the membership fees to BASL. The fee structure is given below:

SEBI has also modified its fee structure w.e.f. 1st April, 2021 vide its amendment notification dated 11th January, 2021. It appears that fees to SEBI has been discontinued, instead the fees have to be paid to BASL.

Detailed SOPs and FAQs have been issued by BASL with respect to the membership of BASL and other incidental matters. That can be found here.

https://www.sebi.gov.in/media/press-releases/jun-2021/bse-administration-and-supervision-limited-granted-recognition-for-administration-and-supervision-of-investment-advisers_50540.html

Get ready for increased supervision and more compliances – RIAs


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minimum vesting period

SEBI has vide its notification dated 15th June, 2021 removed the minimum vesting period of one year for an employee under the SEBI (Share Based Employee Benefit) Regulations in case of a death of the said employee. Hitherto there was a one year vesting period in case of employee stock options and stock appreciation rights.

The regulations already specified that in case of death of an employee during the vesting period, all the options, stock appreciation rights, benefits etc. shall vest in his legal heirs or nominees. Now taking this further SEBI has relaxed the requirement of minimum vesting period of one year in case of death of any employee. This right shall immediately devolve onto his legal heirs/ nominees even where the one year vesting period is not over.

This is applicable only in case of deaths occurring after 1st April, 2020.

https://www.sebi.gov.in/legal/circulars/jun-2021/relaxation-from-the-requirement-of-minimum-vesting-period-in-case-of-death-of-employee-s-under-sebi-share-based-employee-benefit-regulations-2014_50545.html

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settlement of running account

SEBI has vide its circular dated 14th June, 2021 slightly modified the settlement of running account of client’s funds lying with the trading member as follows:

5.1. The settlement of running account of funds of the client shall be done by the TM after considering the End of the day (EOD) obligation of funds as on the date of settlement across all the Exchanges, at least once within a gap of 30 /
90 days between two settlements of running account as per the preference of the client.
5.2. In case of client having any outstanding trade position on the day on which settlement of running account of funds is scheduled, a TM may retain funds calculated in the manner specified below:
5.2.1. Entire pay-in obligation of funds outstanding at the end of the day on settlement of running account, of T day & T-1 day.
5.2.2. Margin liability as on the date of settlement of running account, in all segments and additional margins (maximum upto 125% of total margin liability on the day of settlement). The margin liability shall include the end of the day margin requirement excluding the MTM and pay-in obligation, therefore, TM may retain 225% of the total margin liability in all the segments across exchanges. Computation for arriving at retention of excess client funds based on above points would be as under:

^ Excess securities of Rs. 55,000 (i.e. 280000-225000) is not required to be unpledged.
5.2.3. TM will first adjust the value of securities (after applying appropriate haircut) accepted as collateral from the clients by way of ‘margin pledge’ created in the Depository system for the purpose of margin and value of commodities (after applying appropriate haircut) respectively and thereafter TM shall adjust the client funds.
5.2.4. It is clarified that the excess securities (in the form of margin pledge) or any cash equivalent collateral identifiable with the client and deposited with CC, after adjustment of the 225% of margin liability need not be unpledged.
5.3. Client’s running account shall be considered settled only by making actual payment into client’s bank account and not by making any journal entries. Journal entries in client account shall be permitted only for levy / reversal of charges in client’s account.
5.4. For the clients having credit balance, who have not done any transaction in the 30 calendar days since the last transaction, the credit balance shall be returned to the client by TM, within next three working days irrespective of the date when the running account was previously settled.

5.5. In cases where physical payment instrument (cheque or demand draft) is issued by the TM towards the settlement of running account due to failure of electronic payment instructions, the date of realization of physical instrument
into client’s bank account shall be considered as settlement date and not the date of issue of physical instrument.

5.6. Retention of any amount towards administrative / operational difficulties in
settling the accounts of regular trading clients (active clients), shall be
discontinued.
5.7. The Authorized person is not permitted to accept client’s funds and securities. The TM should keep a proper check. Proprietary trading by Authorized person should be permitted only on his own funds and securities and not using any of the client’s fund.
5.8. Once the TM settles the running account of funds of a client, an intimation shall be sent to the client by SMS on mobile number and also by email. The intimation should also include details about the transfer of funds (in case of
electronic transfer – transaction number and date; in case of physical payment instruments – instrument number and date). TM shall send the retention statement along with the statement of running accounts to the clients as per
the existing provisions within 5 working days.
5.9. Client shall bring any dispute on the statement of running account, to the notice of TM within 30 working days from the date of the statement.

This is interesting because my broker sends me margin statement & settlement statement, which i don’t understand heads or tails of it. The whole system is presently opaque and not transparent at all. They should send the information which we lay persons can understand it fully. Never have i got monies settled into my bank account so far. There is something seriously wrong with the system. SEBI should look into it.

https://www.sebi.gov.in/legal/circulars/jun-2021/settlement-of-running-account-of-client-s-funds-lying-with-trading-member-tm-_50570.html

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supervision of RIAs

There was a news which came in Times of India that BSE has set up a supervisory body to regulate the Registered Investment Advisors in the country. Registered Investment Advisors are a breed of professionals who advises individuals on investments and manages their portfolios. They are registered and regulated by SEBI under the SEBI (Investment Advisors) Regulations, 2013. They are known as capital market intermediaries.

Apparently SEBI thought it fit to divest the supervisory role to another entity for which BSE has set up a wholly owned subsidiary BSE Administration & Supervision Ltd. (BASL) to perform that role. Now all existing investment advisors will have to register with this new entity BASL as a member.

Another level of compliances goes up for the investment advisors in the country, sigh!!

The link to the newspaper article is below:

https://m-timesofindia-com.cdn.ampproject.org/c/s/m.timesofindia.com/business/india-business/bse-sets-up-entity-to-administer-supervise-activities-of-registered-investment-advisors/amp_articleshow/83436058.cms

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centralised database for corporate bonds & debentures

SEBI has vide its circular dated 4th June, 2021 streamlined its procedure for the centralised database for corporate bonds & debentures in supersession of its earlier 2013 circular.

The responsibilities of the parties involved and and the manner of posting information in the database, the fields involved etc. are all given in the said circular which can be accessed here

https://www.sebi.gov.in/legal/circulars/jun-2021/centralized-database-for-corporate-bonds-debentures_50421.html

The salient features are given below:

Responsibilities of parties involved, contents of the database and manner of submitting the information
Depositories:
a. Depositories shall continue to jointly create, host, maintain and disseminate the centralized database of corporate bonds, which are available in demat form. All historical data available in the database in terms of SEBI Circular no. CIR/IMD/DF/17/2013 dated October 22, 2013 shall continue to be hosted by the Depositories.
b. Depositories shall ensure to have adequate systems and safeguards to maintain the integrity of data and to prevent manipulation of data.
c. Each Depository shall synchronize the database in consultation with the other Depository.
d. The Depository which receives information from an issuer shall host the same as well as share it with the other Depository for hosting within three working days from the date of receipt of the information.
e. Depositories shall categorise investors as per the SEBI Circular No. CIR/CFD/CMD/13/2015 dated November 30, 2015.
f. Depositories shall provide secure login credentials to Issuers, Stock Exchanges, Credit Rating Agencies and Debenture Trustees for updating and verifying requisite information in the corporate bond database within timelines as mentioned in this circular.
Issuers:
a. Issuers shall fill all the requisite fields as provided in Annex-I in the Centralized Database at the time of allotment of the ISIN. Depositories shall verify the information as provided by issuer at the time of activation of ISIN.
b. Post listing of securities, Issuers shall submit information in the requisite fields as provided in Annex-II to any of the Stock Exchanges where their securities are listed on a periodical basis and/or ‘as and when’ basis event based), as applicable. The Stock Exchange shall indicate the format of filing to the Issuers in this regard.
Stock Exchanges:
a. Stock Exchanges and Depositories shall develop a system such that information received by them is updated on the Centralized Database on a daily basis.
b. Stock Exchanges shall verify listing details as provided in Annex- I and II of the circular in the Centralized Database.
c. Stock Exchanges shall update event based and periodical information in the Centralized Database when received from the Issuers in Annex- II.
Credit Rating Agencies
Credit Rating Agencies shall access the database to verify the rating information uploaded by the Issuer. In case of any discrepancy, Credit Rating Agencies shall notify the same to Stock Exchanges and update the correct information in the database within the time stipulated in Annex – III.
Debenture Trustees
Debenture Trustees shall access the database to verify the information regarding default history and other relevant information. In case of any discrepancy, Debenture Trustee shall notify the same to Stock Exchanges and update the correct information in the database, within the time stipulated in Annex – III.

Depositories shall also provide the information available with respect to the Redeemable Preference Shares and Securitized Debt Instruments, in a separate section within the database, in the form as available with them, after sharing the same with the other depository for synchronizing and updating the database.

All annexures are available for reference in the link given above.

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overseas investment limits for MFs

SEBI has vide its circular dated 3rd June, 2021 enhanced the overseas investment limits for mutual funds as follows:

  1. they can make overseas investments subject to a maximum of US$1 billion per mutual fund subject to an industry limit of USD$7 billion;
  2. in overseas exchange traded fund, they can make investment of US$ 300 million per mutual fund subject to an industry limit of US$1 billion.

The earlier limits were US$600 million (per mutual fund) and US$200 million (for exchange traded fund) respectively. The overall industry limits are the same.

In respect of investment limits to be disclosed in the scheme documents at the time of NFO as specified in Para 2.2 of the aforesaid circular, and the investment limits on ongoing schemes as specified in Para 2.3 of the aforesaid circular, such limits would henceforth be soft limits for the purpose of reporting only by Mutual Funds on monthly basis in the format prescribed vide SEBI circular dated November 5, 2020.

The aforesaid circular referred to above is the Para 1 of SEBI Circular No. SEBI/HO/IMD/DF3/CIR/P/2020/225 dated
November 05, 2020 which is here i.e.

https://www.sebi.gov.in/legal/circulars/nov-2020/circular-on-enhancement-of-overseas-investment-limits-for-mutual-funds_48090.html

https://www.sebi.gov.in/legal/circulars/jun-2021/circular-on-enhancement-of-overseas-investment-limits_50415.html

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IPOs revised timelines – UPI in ASBA

SEBI has vide its circular dated 2nd June, 2021 revised its timelines for implementation of UPI in ASBA in respect of IPOs. This is after the stakeholders approached SEBI seeking additional time for implementation of system changes especially in view of the covid pandemic. Salient features are as follows:

1. SEBI vide Circular No. SEBI/HO/CFD/DIL2/CIR/P/2021/2480/1/M dated March 16, 2021 (hereinafter referred to as “the circular”), which came into effect from May 01, 2021 had put in place measures to have a uniform policy to further streamline the processing of ASBA applications through UPI process among intermediaries/SCSBs and also provided a mechanism of compensation to investors. 

2. The stakeholders have approached SEBI seeking additional time for implementing the system changes given the prevailing uncertainty due to the Covid-19 pandemic. 

3. In view of the representations received from stakeholders, the implementation timelines for the provisions of “the circular” shall be as under: 

3.1SMS Alerts: Para 9 of “the circular” prescribed the details to be sent by SCSB’s in SMS alerts. While SCSB’s shall continue to send SMS alerts during the actual block/debit/unblock of UPI mandate in the prescribed format, the details of total number of shares applied/allotted/non-allotted etc shall be included in SMS for Public Issues opening on/after January 01, 2022. 

3.2Web Portal for CUG: For ease of doing business, Para 10 of “the circular” prescribed a web portal to be hosted by Sponsor Banks for closed user group (hereinafter referred to as “CUG”) entities. In view of the representations received from the stakeholders, it has been decided that: 

3.2.1 The automated web portal shall be live and operational after due testing and mock trials with the CUG entities for Public Issues opening on or after October 01, 2021. The requisite information on this automated portal shall be updated periodically in intervals not exceeding two hours. 

3.2.2 In the interim, for the Public Issues opening from the date of this circular and till the automated web portal is live and operational, the Sponsor Banks shall send the details prescribed in Para 10 of “the circular” to the e-mail address of CUG entities periodically in intervals not exceeding three hours. In case of exceptional events viz., technical issues with UPI handles/PSPs/TPAPS/SCSB’s etc, the same shall be intimated immediately to the CUG entities so as to facilitate the flow of information in the Public Issue process. 

3.2.3 The Stock Exchanges and Lead Managers shall facilitate providing the requisite data of CUG entities to Sponsor Bank for the development of automated web portal. Such information shall be provided to the Sponsor Bank before opening of the Public Issue. 

3.3Completion of Unblocks by T+4: Para 13 of “the circular” prescribed the process and timeline for ensuring the completion of unblocks pertaining to UPI mandates on T+4 (T: Issue Closing Date). while the process of unblocking shall be completed by T+4, in view of the representations received from stakeholders, the following shall be the revised timelines: 

3.3.1 The Registrar to the Issue shall provide the allotment/ revoke files to the Sponsor Bank by 8:00 PM on T+3 i.e, the day when the Basis of Allotment (BOA) has to be finalized. 

3 3.3.2 The Sponsor Bank shall execute the online mandate revoke file for Non-Allottees/ Partial Allottees and provide pending applications for unblock, if any, to the Registrar to the Issue, not later than 5:00 PM on BOA+1. 

3.3.3 Subsequent to the receipt of the pending applications for unblock from the Sponsor Bank, the Registrar to the Issue shall submit the bank-wise pending UPI applications for unblock to the SCSBs, not later than 6:30 PM on BOA+1. 

3.3.4 To ensure that the unblocking is completed on T+4, the Lead Managers, on a continuous basis and before the opening of the public issue shall take up the matter with the SCSB’s at appropriate level. 

4. This circular comes into force with immediate effect. 

5. The contents of the circular shall be mentioned in the DRHP and RHP filed on or after the date of this circular. 

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foreign portfolio investors

SEBI circular dated 1st June, 2021 allowing a one off, “off-market” transfer of securities by foreign portfolio investors for transferring to IFSC at Gift City, Ahmedabad, which gives substantial tax benefits as per the Finance Act, 2021. Gist of circular follows:

1. The Finance Act, 2021 provides tax incentives for relocating foreign funds to International Financial Services Centre (IFSC) in order to make the IFSC in GIFT City a global financial hub. 

2. In view of the above objective and to further facilitate such ‘relocation’, it has been decided that a FPI (‘original fund’ or its wholly owned special purpose vehicle) may approach its DDP for approval of a one-time ‘off-market’ transfer of its securities to the ‘resultant fund’. The terms ‘original fund’, ‘relocation’ and ‘resultant fund’ will have the same meaning as assigned to them under the Finance Act, 2021. 

3. The DDP after appropriate due diligence may accord its approval for a one-time ‘offmarket’ transfer of securities for such relocation. 

4. Relocation request will imply that the FPI has deemed to have applied for surrender of its registration and the DDP may be guided by the guidelines pertaining to surrender of FPI registration. 

5. The ‘off-market’ transfer shall be allowed without prejudice to any provisions of tax laws and FEMA. 6. Para 3, Part C of SEBI Circular No. IMD/FPI&C/CIR/P/2019/124 dated November 05, 2019 stands modified to the extent of para 2 above. 

https://www.sebi.gov.in/legal/circulars/jun-2021/-off-market-transfer-of-securities-by-fpi_50380.html

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LODR compliances – corp gov.

SEBI has mandated an additional set of compliances for listed entities – under regulation 27 of the Listing Obligations and Disclosure Requirements Regulations 2015. Now disclosures around loans/ guarantees/ letters of comfort/ securities provided by listed entities to their promoter or promoter group entities or any other entity controlled by them, either directly or indirectly has to be made on a half yearly basis from the financial year 2021-22.

The format of the report is given in this circular

https://www.sebi.gov.in/legal/circulars/may-2021/format-of-compliance-report-on-corporate-governance-by-listed-entities_50338.html

Apart from this, there are three other corporate governance reporting to be done in various periods as enumerated under:

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alternative investment funds

SEBI has vide its circular dated 21st May, 2021 enhanced the overseas investment limits for SEBI registered alternative investment funds (AIFs)/ venture capital funds (VCFs) from USD 750 million to USD 1500 million. Details follow.

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