The document discusses proposed changes to SEBI's delisting regulations. Some key changes include determining the final exit price based on the highest price at which the promoter can reach the 90% threshold, instead of the price where most shares are tendered. Timelines for the delisting process would be shortened. Small companies with capital up to Rs. 10 crore and net worth up to Rs. 25 crore would now be eligible for direct delisting. Restrictions on promoter group share sales prior to delisting are also introduced.
Fundraising for businesses was an arbitrary practice without any formal guidelines and regulations before Companies Act 2013. Due to lacunae of legal provisions in Companies Act 1956, many a times, corporate with fraudulent mindset have found their way to dupe investors and public of their hard-earned money. It has created many legal disputes and controversies.
Now, new Companies Act and the consequent rules have formally covered all the modes of fund-raising and have tried to fill in the loopholes of old law. Stringent rules and cumbersome compliances are to ensure safeguard of the public money and restrict the malpractices. But these provisions have created confusion in respect of implementation and compliances. The easy availability of funds for businesses in real need has also dried up. MCA must come out some clarification to give breathing time to companies specifically for private companies.
The document discusses the SEBI (ICDR) Regulations 2009 and recent amendments relating to issue management. It provides an overview of the key aspects regulated by the ICDR regulations including specified securities, structure of regulations, issues not regulated, and eligibility requirements for public issues. Recent amendments are highlighted including changes to preferential issues, QIP, book building process and minimum listing requirements. Key considerations for different types of public issues such as pricing, allocation and lock-ins are also summarized.
The document discusses various aspects of SEBI Takeover Code regulations including key definitions, compliance requirements, disclosure obligations, thresholds, exemptions and pricing provisions. Some key highlights include:
- Definitions of acquirer, shares, person acting in concert and what constitutes control.
- Disclosure obligations for acquisitions above certain thresholds (5%, 15% etc.) and timelines to comply.
- Exemptions available for inter-se transfers between qualifying persons subject to certain conditions.
- Determination of open offer price based on highest negotiated price or volume weighted average price for frequently/infrequently traded shares.
- Issues around interpretation of creeping acquisition limits and applicability of regulations.
This document provides definitions and explanations related to takeovers and the Takeover Code in India. It defines key terms like acquirer, control, shares, promoter, person acting in concert, target company. It summarizes regulations around disclosures for acquisition of shares above certain thresholds and the requirement for open offers when acquisition of shares takes the holding above certain levels like 15% and 55%. It also discusses judgements around interpretation of some of these terms.
The document summarizes key aspects of mergers and acquisitions under the Companies Act 2013 in India. It discusses various tools of restructuring like merger, amalgamation, demerger, acquisition of shares. It provides details of the regulatory framework, approval process, benefits and motives. It specifically explains provisions for fast track mergers, cross border mergers, and single window clearance which allows related proposals to be considered together with a scheme.
This presentation clarifies the provisions of SEBI Takeover Code including exemptions and creeping acquisition provisions. In addition to this, it gives an anlaysis of recent amendment in regulations and judicial pronouncements made under these regulations.
The document discusses the SEBI (ICDR) Regulations 2009 and recent amendments relating to issue management. It provides an overview of the key aspects regulated by the ICDR regulations including specified securities, structure of regulations, issues not regulated, and eligibility requirements for public issues. Recent amendments are highlighted including changes to preferential issues, QIP, book building process and minimum listing requirements. Key considerations for different types of public issues such as pricing, allocation and lock-ins are also summarized.
This document discusses corporate restructuring tools like takeovers, buybacks, and delisting. It defines takeovers as the acquisition of substantial shares and control over a target company. Buybacks allow companies to buy back their own shares from existing shareholders. Delisting is the removal of a company's stock from a stock exchange. The key regulations governing these tools in India are the SEBI Takeover Code, Companies Act provisions on buybacks, and SEBI Delisting Regulations. The document outlines the processes, requirements, and methods involved in takeovers, buybacks and delisting.
Fundraising for businesses was an arbitrary practice without any formal guidelines and regulations before Companies Act 2013. Due to lacunae of legal provisions in Companies Act 1956, many a times, corporate with fraudulent mindset have found their way to dupe investors and public of their hard-earned money. It has created many legal disputes and controversies.
Now, new Companies Act and the consequent rules have formally covered all the modes of fund-raising and have tried to fill in the loopholes of old law. Stringent rules and cumbersome compliances are to ensure safeguard of the public money and restrict the malpractices. But these provisions have created confusion in respect of implementation and compliances. The easy availability of funds for businesses in real need has also dried up. MCA must come out some clarification to give breathing time to companies specifically for private companies.
The document discusses the SEBI (ICDR) Regulations 2009 and recent amendments relating to issue management. It provides an overview of the key aspects regulated by the ICDR regulations including specified securities, structure of regulations, issues not regulated, and eligibility requirements for public issues. Recent amendments are highlighted including changes to preferential issues, QIP, book building process and minimum listing requirements. Key considerations for different types of public issues such as pricing, allocation and lock-ins are also summarized.
The document discusses various aspects of SEBI Takeover Code regulations including key definitions, compliance requirements, disclosure obligations, thresholds, exemptions and pricing provisions. Some key highlights include:
- Definitions of acquirer, shares, person acting in concert and what constitutes control.
- Disclosure obligations for acquisitions above certain thresholds (5%, 15% etc.) and timelines to comply.
- Exemptions available for inter-se transfers between qualifying persons subject to certain conditions.
- Determination of open offer price based on highest negotiated price or volume weighted average price for frequently/infrequently traded shares.
- Issues around interpretation of creeping acquisition limits and applicability of regulations.
This document provides definitions and explanations related to takeovers and the Takeover Code in India. It defines key terms like acquirer, control, shares, promoter, person acting in concert, target company. It summarizes regulations around disclosures for acquisition of shares above certain thresholds and the requirement for open offers when acquisition of shares takes the holding above certain levels like 15% and 55%. It also discusses judgements around interpretation of some of these terms.
The document summarizes key aspects of mergers and acquisitions under the Companies Act 2013 in India. It discusses various tools of restructuring like merger, amalgamation, demerger, acquisition of shares. It provides details of the regulatory framework, approval process, benefits and motives. It specifically explains provisions for fast track mergers, cross border mergers, and single window clearance which allows related proposals to be considered together with a scheme.
This presentation clarifies the provisions of SEBI Takeover Code including exemptions and creeping acquisition provisions. In addition to this, it gives an anlaysis of recent amendment in regulations and judicial pronouncements made under these regulations.
The document discusses the SEBI (ICDR) Regulations 2009 and recent amendments relating to issue management. It provides an overview of the key aspects regulated by the ICDR regulations including specified securities, structure of regulations, issues not regulated, and eligibility requirements for public issues. Recent amendments are highlighted including changes to preferential issues, QIP, book building process and minimum listing requirements. Key considerations for different types of public issues such as pricing, allocation and lock-ins are also summarized.
This document discusses corporate restructuring tools like takeovers, buybacks, and delisting. It defines takeovers as the acquisition of substantial shares and control over a target company. Buybacks allow companies to buy back their own shares from existing shareholders. Delisting is the removal of a company's stock from a stock exchange. The key regulations governing these tools in India are the SEBI Takeover Code, Companies Act provisions on buybacks, and SEBI Delisting Regulations. The document outlines the processes, requirements, and methods involved in takeovers, buybacks and delisting.
This document discusses various types of corporate restructuring such as mergers, demergers, and reduction of capital. It outlines the regulatory framework and listing requirements for such transactions. It also provides examples of restructuring strategies that listed companies can pursue, such as direct listings, increasing promoter holdings, acquiring other listed companies, and increasing resources without raising additional capital. Overall, the document presents corporate restructuring as a strategic tool for companies to grow, add shareholder value, and unlock their full potential.
The document summarizes the key proposed changes to SEBI's takeover regulations and perspectives from industry. Some major changes include increasing the threshold for a mandatory open offer from 15% to 25%, requiring any change in control to be through an open offer, increasing the minimum offer size from 20% to 100%, and reducing the timeline for completing an open offer. While some changes like a higher threshold align with global norms, industry has concerns around issues like cost increases and fewer open offer opportunities due to the changes.
This document outlines the contents of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations 2011, which provides the legal framework for takeover bids and acquisitions of Indian public companies. It discusses the objectives of the regulations, key definitions, triggers for mandatory open offers, offer size and pricing requirements, escrow accounts, the open offer process, obligations of acquirers and target companies, exemptions, and penalties for non-compliance. The regulations aim to protect investors and ensure fair acquisition processes along with timely disclosure of information.
The document summarizes a paper reviewing the evolution of India's takeover code and key recommendations of the TRAC committee report. It discusses how the code began with Clause 40 of the listing agreement and was later formalized through SEBI regulations. The TRAC report suggested increasing the initial open offer trigger from 15% to 25% shares, requiring open offers for all shares, and strengthening disclosure requirements. It also analyzed judicial precedents and concluded the code aims to ensure fairness while balancing stakeholder interests but full harmonization of regulations is still needed.
substantial acquisition of shares and take overs (India)92_neil
The document provides an overview of substantial acquisitions of shares and takeovers in India, including definitions of key terms, the evolution and objectives of takeover regulations, types of takeovers and triggers for open offers. It discusses topics such as acquirers, target companies, control, promoters and promoter groups. The presentation also outlines the process, pricing and obligations in public announcements and open offers.
The document discusses various aspects of corporate restructuring in India such as mergers, amalgamations, demergers, slump sales, and financial restructuring. It provides an overview of the key regulations governing takeovers in India from the Securities and Exchange Board of India. Examples of different corporate restructuring techniques including mergers and demergers are presented along with considerations around valuation, share exchange ratios, stamp duty implications and more. Two case studies demonstrating the use of group restructuring to increase promoter shareholding are also summarized.
The document provides an overview of the SEBI Takeover Regulations, 2011. It discusses the need for takeover regulations in India due to changes in the capital market scenario. The key highlights of the regulations include thresholds for open offers, exemption limits for disclosure requirements, and obligations of acquirers and merchant bankers. Key definitions under the regulations relate to acquirer, acquisition, control, frequently traded shares, and enterprise value calculation.
The document summarizes the key aspects of SEBI (ICDR) Regulations 2009, which govern public and rights issues of specified securities in India. It discusses the eligibility requirements for issuers, types of public issues, allocation process, pricing considerations, promoters' contribution and lock-in periods. It also provides an overview of recent amendments made to the regulations in areas such as book building process, minimum public shareholding, and facilitation of issues by small and medium enterprises.
The 2015 budget had long list of expectations. On one hand; the Government has addressed major issues surrounding the foreign investors which would certainly boost capital market inflows and revive the private equity industry (by deferring GAAR by 2 years and clarifying Permanent Establishment & Indirect Transfer of Assets). On other hand; it has just rationalized the subsidies. Probably as we see growth coming in and more job creation; subsidy burden can be better dealt with by the Government. Though there are no direct benefits for the middle class. However incentives have been introduced to encourage savings. These savings are expected to fuel the infrastructure and other investment plans laid out by the Government. Certainly Foreign investors have a reason to cheer for this Pro Business; Pro Growth Government budget.
Employee stock option plans (ESOPs) are used by companies to attract, motivate, and retain employees. There are several types of ESOPs that provide equity incentives like stock options, stock purchase plans, restricted stock units, and stock appreciation rights. Key aspects of ESOPs include how they are granted and vested over time, tax implications, regulatory requirements, and accounting treatment. ESOPs must be implemented according to the rules for listed and unlisted companies set out by the Companies Act, Income Tax Act, SEBI, and other regulatory bodies to ensure proper governance and compliance.
The document summarizes key aspects of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 or the SEBI Takeover Code. It outlines the objectives of protecting shareholder interests and ensuring adequate disclosure in M&A transactions. It defines important terms like acquirer, control and persons acting in concert. It also describes provisions around periodic disclosures, open offer triggers, exemptions and timelines that must be followed for open offers.
The document discusses various types of corporate restructuring like merger, demerger, and reduction of capital. It outlines the role and requirements of stock exchanges in approving such restructuring schemes. Stock exchanges expect listed companies to comply with continuous listing requirements and clauses in the listing agreement. They also have norms around minimum capital, non-promoter holding, and lock-in periods to ensure the transaction does not unduly benefit promoters and protects investors.
The document summarizes key aspects of the SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 2011 regarding takeover of listed companies in India. It defines important terms like acquirer, acquisition, control and outlines the regulations around substantial acquisition of shares or voting rights that trigger an open offer like acquiring over 25% under Regulation 3(1) or creeping acquisition of up to 5% annually under Regulation 3(2). It also describes the process and compliance requirements for open offers including appointment of a merchant banker, contents of public announcement, escrow account, competing offers, exemptions and general obligations of acquirers.
1. The document discusses various regulations under the SEBI Takeover Code regarding disclosure requirements and compliance obligations when acquiring shares or voting rights in an Indian listed company beyond certain thresholds.
2. It compares key terms and explains regulations around continual disclosures, event-based disclosures, and the requirement to make a public announcement when acquiring shares or voting rights beyond certain levels.
3. It addresses issues around claiming exemptions under the Takeover Code regulations, applicability of regulations to indirect acquisitions such as those through a scheme of arrangement, and factors to consider for investment decisions that may invoke the Takeover Code.
EXTRACT OF THE PRESENTATION - FOR THE CASE LAWS COVERED IN THE SESSION & SEMINARS, FEEL FREE TO EMAIL ME.
SPECIAL THANKS TO CS SHAILASHRI BHASKAR MA'AM, CS PAVAN KUMAR VIJAY SIR FOR THEIR GUIDANCE.
SEBI Guidelines for Merger and Acquisition.
SEBI (Security Exchange Board of India)
Merger - Combination of two companies
Acquisition - When one company purchase most or all the company assets/shares.
Guidelines - Government body described some rules and regulations to follow.
The new Takeover Code of 2011 introduced several changes from the previous 1997 code:
1. The threshold for triggering an open offer was increased from 15% to 26% shareholding in the target company.
2. The minimum size of the open offer was increased from 20% to 25% of the total shares of the target company.
3. Non-compete fees paid to promoters of the target company are no longer permitted.
The new code aims to provide greater protection to minority shareholders and ensure fair share acquisition during takeovers.
Recent Changes In Capital Market - An Analysis of SEBI Takeover CodePavan Kumar Vijay
This presentation provides background and analysis of recent amendment in SEBI Takeover Code and judicial pronouncements made under these regulations. Besides, the presentation also answers certain controversial issues frequently questioned by the users.
The new SEBI (Prohibition of Insider Trading) Regulations, 2015 were notified on January 15, 2015 to tighten regulations around insider trading. Key aspects of the new regulations include expanded definitions of "insider" and "connected persons", prohibitions on trading based on unpublished price sensitive information, increased responsibilities for compliance officers, requirements for initial and continual shareholding disclosures, and penalties for non-compliance. The regulations aim to align India's insider trading framework with global standards and plug existing loopholes.
The document discusses key aspects of a listing agreement that a company must sign when getting listed on a stock exchange. It outlines important clauses like disclosure requirements, record keeping, shareholder approval processes, and compliance with stock exchange regulations. Real estate listing agreements similarly outline the terms of an agreement between a broker and property seller, including commission structure, exclusivity periods, and authorization to market the property.
Company Secretaries- Adding Value through TechnologyPavan Kumar Vijay
With the advancement of IT and Internet-based systems and tools, the scope of corporate and legal consultancy has widened; we can easily provide services to bigger and global clients. But the competition will also be with global players. So Company Secretaries have to learn and adapt new technologies to provide speedy solutions with collaboration of Human Intelligence and Internet based knowledge.
Corporate Governance is not only a legal compliance but is necessary for the optimum growth of a business. A transparent and well-governed company is perceived to be doing business in honest way and contributing in the development and wellness of society. Therefore businesses should adapt system of Corporate Compliance Management to establish and maintain Ethics, Integrity and Accountability in their routine. सत्यं वद, धर्मं चर (Forever Speak the Truth and Follow the Dharma) has been the mantra of good people and same applies to Corporate and Business.
Today I was at Assocham’s 2nd National Conference on Corporate Compliance Management to give my view on the quest for Corporate Governance and necessity of Corporate Compliance Management.
This document discusses various types of corporate restructuring such as mergers, demergers, and reduction of capital. It outlines the regulatory framework and listing requirements for such transactions. It also provides examples of restructuring strategies that listed companies can pursue, such as direct listings, increasing promoter holdings, acquiring other listed companies, and increasing resources without raising additional capital. Overall, the document presents corporate restructuring as a strategic tool for companies to grow, add shareholder value, and unlock their full potential.
The document summarizes the key proposed changes to SEBI's takeover regulations and perspectives from industry. Some major changes include increasing the threshold for a mandatory open offer from 15% to 25%, requiring any change in control to be through an open offer, increasing the minimum offer size from 20% to 100%, and reducing the timeline for completing an open offer. While some changes like a higher threshold align with global norms, industry has concerns around issues like cost increases and fewer open offer opportunities due to the changes.
This document outlines the contents of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations 2011, which provides the legal framework for takeover bids and acquisitions of Indian public companies. It discusses the objectives of the regulations, key definitions, triggers for mandatory open offers, offer size and pricing requirements, escrow accounts, the open offer process, obligations of acquirers and target companies, exemptions, and penalties for non-compliance. The regulations aim to protect investors and ensure fair acquisition processes along with timely disclosure of information.
The document summarizes a paper reviewing the evolution of India's takeover code and key recommendations of the TRAC committee report. It discusses how the code began with Clause 40 of the listing agreement and was later formalized through SEBI regulations. The TRAC report suggested increasing the initial open offer trigger from 15% to 25% shares, requiring open offers for all shares, and strengthening disclosure requirements. It also analyzed judicial precedents and concluded the code aims to ensure fairness while balancing stakeholder interests but full harmonization of regulations is still needed.
substantial acquisition of shares and take overs (India)92_neil
The document provides an overview of substantial acquisitions of shares and takeovers in India, including definitions of key terms, the evolution and objectives of takeover regulations, types of takeovers and triggers for open offers. It discusses topics such as acquirers, target companies, control, promoters and promoter groups. The presentation also outlines the process, pricing and obligations in public announcements and open offers.
The document discusses various aspects of corporate restructuring in India such as mergers, amalgamations, demergers, slump sales, and financial restructuring. It provides an overview of the key regulations governing takeovers in India from the Securities and Exchange Board of India. Examples of different corporate restructuring techniques including mergers and demergers are presented along with considerations around valuation, share exchange ratios, stamp duty implications and more. Two case studies demonstrating the use of group restructuring to increase promoter shareholding are also summarized.
The document provides an overview of the SEBI Takeover Regulations, 2011. It discusses the need for takeover regulations in India due to changes in the capital market scenario. The key highlights of the regulations include thresholds for open offers, exemption limits for disclosure requirements, and obligations of acquirers and merchant bankers. Key definitions under the regulations relate to acquirer, acquisition, control, frequently traded shares, and enterprise value calculation.
The document summarizes the key aspects of SEBI (ICDR) Regulations 2009, which govern public and rights issues of specified securities in India. It discusses the eligibility requirements for issuers, types of public issues, allocation process, pricing considerations, promoters' contribution and lock-in periods. It also provides an overview of recent amendments made to the regulations in areas such as book building process, minimum public shareholding, and facilitation of issues by small and medium enterprises.
The 2015 budget had long list of expectations. On one hand; the Government has addressed major issues surrounding the foreign investors which would certainly boost capital market inflows and revive the private equity industry (by deferring GAAR by 2 years and clarifying Permanent Establishment & Indirect Transfer of Assets). On other hand; it has just rationalized the subsidies. Probably as we see growth coming in and more job creation; subsidy burden can be better dealt with by the Government. Though there are no direct benefits for the middle class. However incentives have been introduced to encourage savings. These savings are expected to fuel the infrastructure and other investment plans laid out by the Government. Certainly Foreign investors have a reason to cheer for this Pro Business; Pro Growth Government budget.
Employee stock option plans (ESOPs) are used by companies to attract, motivate, and retain employees. There are several types of ESOPs that provide equity incentives like stock options, stock purchase plans, restricted stock units, and stock appreciation rights. Key aspects of ESOPs include how they are granted and vested over time, tax implications, regulatory requirements, and accounting treatment. ESOPs must be implemented according to the rules for listed and unlisted companies set out by the Companies Act, Income Tax Act, SEBI, and other regulatory bodies to ensure proper governance and compliance.
The document summarizes key aspects of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 or the SEBI Takeover Code. It outlines the objectives of protecting shareholder interests and ensuring adequate disclosure in M&A transactions. It defines important terms like acquirer, control and persons acting in concert. It also describes provisions around periodic disclosures, open offer triggers, exemptions and timelines that must be followed for open offers.
The document discusses various types of corporate restructuring like merger, demerger, and reduction of capital. It outlines the role and requirements of stock exchanges in approving such restructuring schemes. Stock exchanges expect listed companies to comply with continuous listing requirements and clauses in the listing agreement. They also have norms around minimum capital, non-promoter holding, and lock-in periods to ensure the transaction does not unduly benefit promoters and protects investors.
The document summarizes key aspects of the SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 2011 regarding takeover of listed companies in India. It defines important terms like acquirer, acquisition, control and outlines the regulations around substantial acquisition of shares or voting rights that trigger an open offer like acquiring over 25% under Regulation 3(1) or creeping acquisition of up to 5% annually under Regulation 3(2). It also describes the process and compliance requirements for open offers including appointment of a merchant banker, contents of public announcement, escrow account, competing offers, exemptions and general obligations of acquirers.
1. The document discusses various regulations under the SEBI Takeover Code regarding disclosure requirements and compliance obligations when acquiring shares or voting rights in an Indian listed company beyond certain thresholds.
2. It compares key terms and explains regulations around continual disclosures, event-based disclosures, and the requirement to make a public announcement when acquiring shares or voting rights beyond certain levels.
3. It addresses issues around claiming exemptions under the Takeover Code regulations, applicability of regulations to indirect acquisitions such as those through a scheme of arrangement, and factors to consider for investment decisions that may invoke the Takeover Code.
EXTRACT OF THE PRESENTATION - FOR THE CASE LAWS COVERED IN THE SESSION & SEMINARS, FEEL FREE TO EMAIL ME.
SPECIAL THANKS TO CS SHAILASHRI BHASKAR MA'AM, CS PAVAN KUMAR VIJAY SIR FOR THEIR GUIDANCE.
SEBI Guidelines for Merger and Acquisition.
SEBI (Security Exchange Board of India)
Merger - Combination of two companies
Acquisition - When one company purchase most or all the company assets/shares.
Guidelines - Government body described some rules and regulations to follow.
The new Takeover Code of 2011 introduced several changes from the previous 1997 code:
1. The threshold for triggering an open offer was increased from 15% to 26% shareholding in the target company.
2. The minimum size of the open offer was increased from 20% to 25% of the total shares of the target company.
3. Non-compete fees paid to promoters of the target company are no longer permitted.
The new code aims to provide greater protection to minority shareholders and ensure fair share acquisition during takeovers.
Recent Changes In Capital Market - An Analysis of SEBI Takeover CodePavan Kumar Vijay
This presentation provides background and analysis of recent amendment in SEBI Takeover Code and judicial pronouncements made under these regulations. Besides, the presentation also answers certain controversial issues frequently questioned by the users.
The new SEBI (Prohibition of Insider Trading) Regulations, 2015 were notified on January 15, 2015 to tighten regulations around insider trading. Key aspects of the new regulations include expanded definitions of "insider" and "connected persons", prohibitions on trading based on unpublished price sensitive information, increased responsibilities for compliance officers, requirements for initial and continual shareholding disclosures, and penalties for non-compliance. The regulations aim to align India's insider trading framework with global standards and plug existing loopholes.
The document discusses key aspects of a listing agreement that a company must sign when getting listed on a stock exchange. It outlines important clauses like disclosure requirements, record keeping, shareholder approval processes, and compliance with stock exchange regulations. Real estate listing agreements similarly outline the terms of an agreement between a broker and property seller, including commission structure, exclusivity periods, and authorization to market the property.
Company Secretaries- Adding Value through TechnologyPavan Kumar Vijay
With the advancement of IT and Internet-based systems and tools, the scope of corporate and legal consultancy has widened; we can easily provide services to bigger and global clients. But the competition will also be with global players. So Company Secretaries have to learn and adapt new technologies to provide speedy solutions with collaboration of Human Intelligence and Internet based knowledge.
Corporate Governance is not only a legal compliance but is necessary for the optimum growth of a business. A transparent and well-governed company is perceived to be doing business in honest way and contributing in the development and wellness of society. Therefore businesses should adapt system of Corporate Compliance Management to establish and maintain Ethics, Integrity and Accountability in their routine. सत्यं वद, धर्मं चर (Forever Speak the Truth and Follow the Dharma) has been the mantra of good people and same applies to Corporate and Business.
Today I was at Assocham’s 2nd National Conference on Corporate Compliance Management to give my view on the quest for Corporate Governance and necessity of Corporate Compliance Management.
With resolution of Central Government for reforms, transparency and governance in Corporate Sector, sentiments in the Capital Market has turned positive. Companies Act 2013 has also helped in reinstating the confidence of small shareholders in Capital Market.
As the capital market has grown global, it has generated ample need and huge opportunities for pools of ready money for investments in specific sectors. In such a scenario, several new Investor and Market friendly laws like AIF/ REITs and InvIT have been introduced. SEBI has also recently simplified some norms of AIFs. These type of funds will help in rapid development and growth of various sector of the country.
How to Begin Secretarial Audit (Compliance of All Applicable Law )Pavan Kumar Vijay
My Presentation at ICSI on 13/03/2015- "How to Begin- Secretarial Audit".
Secretarial Audit is a process to check compliance with –
• the provisions of various laws and Rules/Regulations/Procedures,
• maintenance of books, records etc,
• by an independent professional to ensure that the company has complied with the legal and procedural requirements and also followed due processes.
• the Board of Directors has to give explanation in the Board’s Report to every qualification and observation or other adverse remark made by the Secretarial Auditor.
•So we can say that the Board of Directors has to ensure that there should be a system in the company through which Compliance Officer can Control on all compliances under all applicable Laws.
Read more...
Due Diligence for Merger & Acquisition, Corporate Restructuring and TakeoverPavan Kumar Vijay
This document provides an overview of due diligence for mergers and acquisitions. It discusses why due diligence is important, the objectives of due diligence, common types of due diligence including financial, legal, tax and operational due diligence. It also outlines the due diligence process, key focus areas, common issues in India and case studies. The goal of due diligence is to evaluate all material aspects of a target company to identify risks and determine an appropriate purchase price, while aiming to make deals rather than kill them.
Technology: Challenges and Opportunities for Company SecretaryPavan Kumar Vijay
Technology and mainly Information Technology has made the knowledge available in digital form and we have easy access to information for reference at any time. This brought both challenges and opportunities for the professionals like Company Secretaries.
As the law has permitted the use of IT in many procedures such as compliance, payments etc., it also expects proficiency in knowledge and efficiency in work from the professionals. Now the mantra of survival and success of a Company Secretary is proper application and management of knowledge, resources and time to compete. There is limitless scope of expanding the horizon for the profession.
The document outlines the vision, offerings, and marketing plans of a corporate law advisory firm. The vision is to become a top brand in providing cost-effective and innovative corporate compliance services. The firm offers existing products like retainership agreements and plans to develop new products like an online legal information website. Detailed marketing plans are provided to promote the various services and products through different channels like tie-ups, advertisements, and approaching potential clients.
Corporate Governance is the practice of transparency in operations and transactions expected from Corporate Houses. सत्यं वद, धर्मं चर (Forever Speak the Truth and Follow the Dharma) has been our old age mantra for high standard of living and governance practices. To imbibe Corporate Governance norms in the structure of a business, leaders have to have vision and inclination towards Ethics, Integrity and Accountability. History has shown that Companies who followed these practices have earned the faith of world at large. Well governed and transparent companies have fared well in their business and also contributed to maintain the inclusive development and growth of society.
Companies Bill 2012 : Overview of Modern Company LawPavan Kumar Vijay
The document provides an overview of the key aspects of the Companies Bill 2012 in India. It discusses the new concepts being introduced like one person companies, class action suits, and registered valuers. It also summarizes the major changes proposed around corporate governance, disclosures and accountability, enforcement of laws, investor protection, and restructuring provisions. The bill aims to bring more flexibility, adoption of international practices, and effective protection for different stakeholders while ensuring healthy growth of companies in India.
Hostile Takeover Strategies with Analysis of Case StudiesPavan Kumar Vijay
This document discusses strategies for hostile takeovers and provides examples. It begins by defining a takeover as acquiring shares or control of a target company. There are two main types of takeovers - friendly/negotiated and hostile. A hostile takeover occurs when a board rejects an offer but the bidder pursues it anyway. Common hostile takeover strategies include tender offers, creeping tender offers, and proxy fights. The document also profiles typical hostile takeover targets and discusses several case studies of hostile takeovers in India.
The document discusses securities law and regulations related to fraud and unfair trade practices. It provides definitions of fraud under common law, the Indian Penal Code, and securities laws. It examines key concepts such as dealing in securities and outlines specific prohibited practices under securities regulations like front running, self-trades, circular trades, and illegal fund mobilization. Exceptions to the definition of fraud are also noted. Comparisons are made between definitions of fraud under contract law versus securities laws.
Corporate Complience Management : A Risk ManagementPavan Kumar Vijay
The document discusses a risk management and compliance package offered by CCM Online. It provides a 4-step process for compliance management that includes identifying applicable laws, creating questionnaires, evaluation, and ongoing monitoring. Key features include coverage of over 200 laws, customization of checklists, alerts and reminders, reporting of compliance status, and expert support. The goal is to help companies systematically manage compliance obligations and risks.
MCA21 is an e-governance initiative of the Ministry of Corporate Affairs that allows for electronic filing of documents. It established a data center in Delhi and disaster recovery center in Chennai to electronically store and retrieve corporate records. MCA21 aims to provide anytime, anywhere services to businesses and stakeholders by transforming the Ministry of Corporate Affairs' operations to meet 21st century needs. It has led to faster processing times, increased transparency, and empowered citizens, businesses and other stakeholders with easy access to authentic corporate data.
The MCA 21 project implemented an e-governance system to modernize the processes of company registration and compliance in India. It was implemented by Tata Consultancy Services for the Ministry of Corporate Affairs in just 78 weeks. The project created an online portal that allows users to incorporate companies, file statutory documents, search public records, and submit complaints from anywhere at any time. This has provided key benefits like simplified registration and compliance, total transparency, and better investor services.
Corporate Governance - Initiatives and AccountabilityPavan Kumar Vijay
I gave a lecture at ICSI on GOVERNANCE - Initiative and Accountability.
I believe that Corporates are expected to use their Capacity, Knowledge and Resources towards Maximization of stakeholders' value and well-being and progress of humankind.
There are four parts of this presentation-
1. Strengthening Board Framework
2. Stakeholder Interest Protection
3. Transparency and Disclosure
4. Impact of Change
This document discusses key concepts related to business combinations, including defining a business combination, applying the acquisition method, determining goodwill, assessing goodwill impairment, and identifying the acquirer. It provides learning objectives and definitions from IFRS 3 and ASPE related to business combinations. Examples are provided to illustrate accounting for asset acquisitions, share acquisitions, and amalgamations. The calculation and subsequent accounting for goodwill and non-controlling interests are also summarized.
SEBI was formed to protect investors in securities markets and promote orderly development of those markets. It regulates stock exchanges, registers and regulates intermediaries like brokers, merchant bankers, and mutual funds. SEBI's functions include prohibiting market manipulation and insider trading, promoting investor education, inspecting regulated entities, and vetting public issuances. It aims to boost confidence in capital markets through strict regulation and investor protection.
SEBI was established in 1988 and upgraded to a statutory body in 1992 through the SEBI Act. It is headquartered in Mumbai and regulates stock exchanges and other market intermediaries. SEBI aims to protect investors, ensure fair practices, and promote an efficient securities market. It has regulatory and developmental functions, including licensing market intermediaries and promoting research and investor education.
1. Big Net pays P3 million to acquire all of Smallport's assets and liabilities. The consideration includes P1 million cash and 20,000 shares worth P2 million. Since the consideration exceeds the fair value of net assets acquired, Big Net recognizes goodwill of P1 million.
2. Big Net pays P2 million consideration through issuing 20,000 shares worth that amount to acquire Smallport. Since the consideration equals the fair value of net assets acquired, no goodwill or bargain gain is recognized.
3. Business combinations involve an acquirer obtaining control of one or more businesses. The acquisition method is used, where the acquirer identifies and measures identifiable assets,
This document provides an overview of listing and delisting of securities on stock exchanges in India. It discusses the applicable laws and regulations, requirements for initial listing and annual compliance, listing procedures and fees for different types of securities. It also covers the meaning and types of delisting, the process and regulations for voluntary and compulsory delisting from exchanges. Key points discussed include the objectives of listing, merits and demerits, norms for initial public offerings, and ongoing financial and legal requirements for listed companies.
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The practical effects of new listing rule 7.1ACaroline Raw
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- The new rules aim to balance protecting shareholders' interests with facilitating timely capital raisings. Conditions apply regarding eligibility for the increased limit, maximum share discounts, disclosure requirements, and shareholder approval process.
- Specific conditions include the entity seeking annual shareholder approval to use the additional 10% placement capacity, limits on discounts to market price for shares placed, and additional disclosure requirements when shares are placed.
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An initial public offering (IPO) refers to the first sale of stock by a company to the public. IPOs allow companies to raise capital to fund expansion and future growth. Key reasons for companies to go public include raising new capital, gaining future access to capital markets, facilitating mergers and acquisitions, and enhancing prestige. The IPO process involves selecting an underwriter, registering with regulatory agencies, printing a prospectus, conducting a roadshow to market the offering, pricing shares, and selling shares to investors.
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Promulgation of SEBI (Share Based Employee Benefit) Regulations, 2014Corporate Professionals
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1. SCRA prescribes procedures for recognition of stock exchanges by the central government and listing/trading of securities. It gives powers to regulate stock exchanges and make rules for contracts.
2. The Act covers recognition, derecognition, and supervision of stock exchanges. It also discusses corporatization and demutualization of stock exchanges.
3. The document outlines procedures for listing and delisting of securities from recognized stock exchanges, and rights of appeal. It also discusses clearing corporations and additional trading floors.
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1) The document discusses the delisting of Chettinad Cement Corporation shares. Chettinad Cement holds 88.4% of shares and needs only 5.78% more to delist.
2) Smart investors currently hold 8.7% of shares, more than enough for delisting. The top 4 shareholders alone hold 6.2% of shares.
3) Chettinad Cement has set a floor price of Rs 540 per share for delisting, with an indicative price of Rs 575. Delisting is considered highly probable given the shareholding structure.
This document discusses various corporate restructuring strategies and regulatory frameworks for listed companies in India. It describes types of restructuring like merger and demerger under the Companies Act and Income Tax Act. It also discusses stock exchange requirements and norms for approvals of restructuring schemes, including minimum capital and lock-in requirements. Various strategic moves for restructuring are proposed, such as direct listing, increasing promoters' holding beyond 55%, acquiring a listed company to avoid takeover code, and increasing resources without raising capital. A case study of Reliance Industries' unique demerger scheme is also presented.
SEBI regulates the securities market in India with the objectives of protecting investors, promoting market development, and regulating market operations. SEBI oversees primary and secondary markets, registers and monitors intermediaries like mutual funds and brokers, prohibits unfair trading practices, promotes investor education, and regulates substantial acquisitions and mergers. It oversees various aspects of the market like entry norms for listings, disclosure requirements, book building processes, and price stabilization measures. SEBI also regulates foreign institutional investments in India through registration of FIIs and monitoring of investment ceilings.
This document provides an overview of initial public offerings (IPOs) and the IPO process. It defines an IPO as the first time a private company offers shares to the public. IPOs allow companies to raise large amounts of capital by issuing new shares. The document then describes the various steps in the IPO process, including hiring an investment bank, conducting due diligence and filings, roadshows to generate interest, pricing shares either through a fixed price or book building method, submitting applications and allocating shares, and ultimately listing the shares on a stock exchange. It also discusses eligibility norms for companies undertaking an IPO in India and provides an example of how book building works to determine the IPO price.
The TRAC report provides key recommendations to amend the existing SEBI Takeover Regulations, including:
1) Providing more clarity in various definitions, inclusion of judicial decisions, and SEBI views in the regulations.
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3) Aligning regulations with global M&A practices, simplifying provisions around control changes, and reducing non-compete fees.
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This document summarizes the key regulations around initial public offerings (IPOs) and further public offerings (FPOs) in India as per the SEBI (Issue of Capital and Disclosure Requirements) Regulations 2018. It outlines the eligibility criteria for issuers, promoters and directors. It also describes the important aspects of pricing, offer documents, advertising, underwriting, minimum subscription levels, allotment process and post-issue requirements. Key points include minimum net worth, profit and asset requirements for issuers, lock-in periods for promoter shares, minimum 90% subscription threshold and proportionate allotment to retail and non-anchor investors.
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Revamping of SEBI Regulations- Delisting, Takeover and Insider Trading
1. Revamping of SEBI Regulations: A move towards ensuring lucidity in the Regime
2. NEW DELISTING NORMS: A Boost for Promoters as well as Retail Investors
SEBI’s Delisting Arena:
SEBI (Delisting of Equity Shares) Regulations, 2009
(Notified on June 10, 2009)
3. What is Delisting ?
•“Delisting”istotallythereverseoflisting.Todelistmeanspermanentremovalofsecuritiesofalistedcompanyfromastockexchange.Asaconsequenceofdelisting,thesecuritiesofthatcompanywouldnolongerbetradeableatthatstockexchange.
•"Delisting"i.e.thesaidremovalfromaStockExchange,maybeVoluntary(i.e.atthewilloftheCompany)orCompulsory(i.e.outofapenalactionbytheStockExchanges, forthereasonofanyviolations/lapses).
DELISTING
STOCK EXCHANGES
COMPANY
4. Brief History: The Evolution of Delisting Regulations
oIn1979,videcircularNo.F6/9/SE/78datedJune28,1979issuedbytheMinistryofFinance,delistingofcompanieswaspermittedsubjecttocertaincriteriabeing
satisfiedbytheconcernedcompany.
oSEBIvidecirculardatedApril29,1998laiddownaframeworkforvoluntaryor
compulsorydelistingofsecuritiesfromtheStockExchanges.
oSubsequently,SEBIcameoutwithSEBI(DelistingofSecurities)Guidelines, 2003.
oThereafter,SEBI(DelistingofEquityShares)Regulations,2009("thesaid
Regulations")wasnotifiedonJune10,2009.
5. Reasons for Delisting
For
Smaller & undervalued Companies
Other Companies
maintaining a listing status entails various costs which may no longer be justifiable.
maintainingalistingstatusinvolvesvariousongoingcostsrelatingtofinancialreportingrequirements,ad- hocdisclosures,investorrelationsandtheincreaseddemandsonmanagementtodevelopagood
relationshipwithanalystsandinvestors.
7. Why there is a need to review Delisting Regulations??
Minorityshareholdersholdingsignificantstakeexercisedisproportionatepowersindeterminingexitprice;
Parkingofshareswithfriendlyinvestors/Tacitunderstandingbetweenmarketparticipants;
Destabilizationofprocessbyputtingunreasonablebids.
Issueshighlighted:
Pricediscoverymechanism
Lackofsufficientdemand/EnhancingparticipationinRBB
Shorteningofprocess
ThresholdLimit
Delistingofsmallcompanies
IndicativeTimelinestocompletethedelistingprocess
8. Main Highlights of New Delisting Norms vis-à-vis Extant Norms
AsperextantRegulations,theDelistingOfferbeconsideredsuccessfulonlywhenthepostofferholdingofthePromoterreachesthehigherofthefollowing:
When Delisting Offer be considered successful?
90% of the total issued shares of that class
Pre-Offer Promoter Holding + 50% of the Offer Size.
Rationale
To address the concern of informal arrangements or parking with friendly investors
9. Main Highlights of New Delisting Norms vis-à-vis Extant Norms Contd…
Extant Delisting Norms
Proposed Delisting Norms
Final Price= Price at which maximum number of shares are tendered by the Public Shareholders
Final Price= Price at which shareholding of the Promoter plus shares tendered by the public shareholders reaches the threshold limit of 90%
10. Determination of Final Exit Price
ExitpricedeterminedthroughReverseBookBuilding(RBB)tobethehighestpriceatwhichthepromotertouchesthethresholdof90%insteadofthepriceatwhichthemaximumnumberofsharesaretendered:
Bid price (Rs.)
No. of investors
Demand
(no. of shares)
Cumulative Demand
(no. of shares)
550
5
2,50,000
2,50,000
565
8
4,00,000
6,50,000
575
10
2,00,000
8,50,000
585
4
4,00,000
12,50,000
595
6
1,20,000
13,70,000
600
5
1,30,000
15,00,000
605
3
2,10,000
17,10,000
620
1
5,00,000
25,00,000
Exit price as per the proposal
Exit price as per the existing framework
Rationale-To ensure that a single investor does not dictate the price for delisting
Promoter shareholding = 75,00,000 shares
Public shareholding = 25,00,000 shares
Min Tendering = 15,00,000 shares 90% threshold limit for successful Delisting
11. Determination of Exit Price and Exiting No.
Acquirertoreach90%ofthetotalshareholdingforsuccessfuldelistinginsteadof(90%oftotalorpromotershareholdingplus50%ofremainingoffersize,whicheverishigher)asexisting;
Rationale-Promotershareholdinghasbeencappedatmaxof75%andtherequirementofacquiring50%oftheoffersizewouldberedundant
12. Extant Delisting Norms
Proposed Delisting Norms
No Restriction Prescribed
NopersonbelongingtothePromoterGrouphavesoldsharesduringsixmonthsprecedingthedateofBoardMeetingwhereDelistingProposalisapproved.
Main Highlights of New Delisting Norms vis-à-vis Extant Norms Contd…
13. Main Highlights of New Delisting Norms vis-à-vis Extant Norms Contd…
Extant Delisting Norms
Proposed Delisting Norms
Delisting Process generally takes approximately in 117 working days
Delisting Process proposed to be completed approximately in 76 working days
SEBI might waive off the requirement of seeking in-principle
14. Extant Delisting Norms
Proposed Delisting Norms
Company having paid up capital not exceeding Rs. 1 Cr. and having no trading in its scrips immediately preceding 1 year from the the date of decision of delisting;
Or
Company having upto 300 public shareholders and the paid up value of shares held by them is upto Rs. 1 Cr.
Company having paid up capital not exceeding Rs. 10 Cr. and Net worth not exceeding Rs. 25 Cr. as on the last day of previous financial year.
+
No trading during last 1 year
+
Securities are not suspended from Stock Exchange
Main Highlights of New Delisting Norms vis-à-vis Extant Norms Contd…
15. Main Highlights of New Delisting Norms vis-à-vis Extant Norms Contd…
Extant Delisting Norms
Proposed Delisting Norms
No Exemption from compliance with the provisions is allowed.
SEBImayrelaxthestrictenforcementofanyrequirementoftheprovisionsofDelistingRegulations.
16. PROPOSED CHANGE IN DELISTING & TAKEOVER CODE:
New Jigs for the Acquirers
17. SEBI’s Decisions opened new avenues for Acquirers
Option to the Acquirerto delist the shares directly through Delisting Regulations pursuant to triggering Takeover Regulations.
Acquirer whose shareholding increases beyond maximum permissible non- public shareholding pursuant to takeover open offer, is not eligible to make a voluntary delisting offer as per Delisting Regulations unless a period of 12 months is elapsed.
On the specific demand of industry
Subject to a stipulation
Incase delisting attempts fails, Acquirer would be required to complete mandatory open offer under Takeover Regulations along with payment of interest @ 10% p.a. for the delayed open offer.
20. Case Study……
ACompanyhavingPromoterShareholdingof64%andoutof36%ofNon-PromoterShareholding, 30%stakeisheldby2foreigninvestorsandrest6%byGeneralPublic.Since,sharesoftheCompanyareinfrequentlytradedand2foreigninvestorsdonotwanttotendersharesintheDelistingOfferandarewillingtobeapartofPAC,onlyforthepurposeofDelisting??
Whether the said foreign investors can be considered as PAC only for the purpose of Delisting Offer??
21. SEBI’s Decision pertaining to tendering of shares in Delisting/Buyback/Takeover offers
AwelcomemovethatallowsuseofStockExchangePlatformfortenderingsharesinDelisting/Buyback/Takeoveroffershaveultimatelyresultedinremovingtaxhurdlesresultingina“win-win”situationforstakeholders.
22. Present Scenario in Buyback, Takeover & Delisting Offers
Proposed Scenario
Considered as off market transaction and liable to hefty Capital Gain Tax in the hands of investors.
Considered as secondary market transaction and now liable only to STT i.e. Investors are not liable to pay Capital Gain Tax.
ThiswasalongdrawndemandfromtheInvestorscommunitythattenderingofsharesundertheseoffersshouldnotattractCapitalGains(CG)Tax,buttheSecuritiesTransactionTax(STT)
Tax Burden
24. What is Insider Trading?
Insider trading is dealing in securities of a listed company by
any person who has knowledge of material inside information
which is not available to general public.
It is breach of a fiduciary duty or other relationship of trust,
and confidence.
It is a crime if made to get wrongful gain or avoid losses
27. Main Highlights of SEBI’s decisions to amend Insider Trading Regulations
oReviewofthe22yearoldInsiderTradingRegulations:ThesaidRegulationswerepromulgatedin1992andovertheyears,thecapitalmarketsscenariohaschangedalot,sothisoverhaulingisawelcomemove;
oProposedtointroduceprovisionsonProhibitiononderivativetradingbydirectorsandKMPsonsecuritiesoftheCompanyinlinewiththeCompaniesAct,2013;
oProposaltointroduceconceptofthird-partyconnectedpersonswiththeintenttocurbmalpractices.
29. INSIDER TRADING –Sec 195 of Companies Act, 2013
Any act
Subscribing, buying, selling, dealing
Agreeing to subscribe, buy, sell or deal
of
OR
OR
In any securities by any
Director
KMP
Any other officer of the company
OR
Either as principal or agent, if such
OR
Director
KMP
Any other officer of the company
OR
Is reasonably expected to have access to any non-public price sensitive information in respect of securities of Company
An act of counseling about procuring or communicating directly or indirectly any non public price sensitive information in respect of securities of Company
OR
30. INSIDER –As per SEBI (Prohibition of Insider Trading) Regulations, 1992
connected with the company
OR
deemed to have been connected with the company
AND
Is reasonably expected to have access to
UNPUBLISHED PRICE SENSITIVE INFORMATION
Has Received
Has Had Access
UNPUBLISHED PRICE SENSITIVE INFORMATION
OR
TO
OR
(ii)
is
was
OR
Any Person
Who
(i)
contractual employees and intermediaries
including Consultants
Now Includes
32. may reasonably to have an access to
Unpublished Price Sensitive Information
is a director under section 2(13) of the Companies Act, 1956,
or
deemed to be a director of that company under section 307(10) of the Act
Any Person
Who
Whether TEMPORARY or PERMANENT
Professional relationship
Business relationship
an officer
an employee
OR
occupies the position Involving
or
or
AND
CONNECTED PERSON –As per SEBI (Prohibition of Insider Trading) Regulations, 1992
now
Immediate relatives
33. Main Highlights Related to Connected Person
Now,inthecaseofconnectedpersons,onusofproofhasbeenshiftedfromtheRegulatortosuchconnectedpersonthattheywerenotinpossessionofUnpublishedPriceSensitiveInformation.Thatistosay,now,itwillbeforsuchpersonstoprovethatwhiledoingthetrade,theywerenotinpossessionofanyunpublishedpricesensitiveinformation.
This is in line with the judgment passed in one of the Insider Trading Case being decided in US wherein Driver was guilty of using Price Sensitive Information.
35. PRICE SENSITIVE INFORMATION-AS PER CLAUSE 36 LISTING AGREEMENT
Change in the general character or nature of business.
Disruption of operations due to natural calamity.
Commencement of Commercial Production/ Commercial Operations.
Litigations/ dispute with a material Impact.
Revisions in Ratings.
36. PRICE SENSITIVE INFORMATION-AS PER CLAUSE 36 LISTING AGREEMENT
Anyotherinformationhavingbearingontheoperation/performanceoftheCompanyaswellaspricesensitiveinformationwhichincludesbutnotrestrictedto:
oChange in market lot / sub-division ;
oVoluntary delisting by the company ;
oForfeiture of shares;
oAlteration in terms of any securities ;
oInformation regarding securities issued abroad ;
oCancellation of dividend/ rights/ bonus etc.
37. Deemed Price Sensitive Information as per Stock Exchange Directives
Periodical financial results of the company;
Intended declaration of dividend;
Issue of securities orbuy back of securities;
Major expansion plan OR Execution of new projects;
Amalgamations, merger, takeovers;
Disposal of whole or substantial part of the undertaking;
Changes in policies, plans or operations
38. UNPUBLISHED –As per SEBI(Prohibition of Insider Trading) Regulations, 1992
Informationwhichisnotpublishedbythecompanyoritsagentsandisnotspecificinnature.
Explanation
Speculativereportsinprintorelectronicmediashallnotbeconsideredaspublishedinformation.
As per SEBI’s Board Meeting Decision, it is proposed to link the unpublished Price Sensitive Information with listing agreement thereby widening the ambit of price sensitive information i.e. unpublished would not be considered from Co.’s point of view only but from the securities point of view as well. For eg: Pledge of Shares by Promoters
Taking into account investors’ interest in the securities market and to facilitate legitimate business transactions, advance disclosure of UPSI at least 2 days prior to trading has been made mandatory
NowbyaligningwhatwouldtantamounttoUPSIwiththeListingAgreement,thearenaofUPSIhasbeenmadeinclusive.
39. CHINESE WALL
•"ChineseWall"policydemarcates“insideareas”from"publicareas".
•Thoseareashavingaccesstoconfidentialinformation, considered“insideareas”andareaswhichdealwithsales/marketing/investmentconsidered"publicareas".
•TheemployeesintheinsideareashallnotcommunicateanyPSItoanyoneinpublicarea.
•Inexceptionalcircumstancesemployeesfromthepublicareasmaybebrought"overthewall"andgivenconfidentialinformationonthebasisof"needtoknow" criteria,underintimationtotheCO
40. Introduction of NEED TO KNOW CONCEPT
ClearProhibitiononCommunicationofUPSIexceptforlegitimatepurposes, performanceofdutiesordischargeoflegalobligations
TostrengthentheconceptofCHINESEWALL,thenewconceptof“NEEDTOKNOW”isproposedtobeincludedintheproposedRegulationsonInsiderTrading
42. PRE CLEARANCE OF TRADES
•AllD/O/EoftheCoandtheirdependentsasdefinedbythecompanywhointendtodealinthesecuritiesbeyondalimitshouldpre-clearthetransactions.
•AnapplicationtotheComplianceofficerindicating
•TheestimatednumberofsecuritiesthattheD/O/Eandtheirdependantsintendstodealin,
•Otherdetailsasmayberequiredbyanyrulemadebythecompanyinthisbehalf.
As per SEBI’s Board Meeting Decision, to facilitate bonafide transactions, requirement to formulate trading plans has been casted on the insiders who are in the possession Price Sensitive Information through out the year.
43. Mandatory requirement to formulate pre- scheduled Trading Plans
InsiderswhogeneralpossessUPSIallroundtheyearandwhotradeinthesecurities, arerequiredtoformulateprescheduledtradingplans,tobedulydisclosedtotheStockExchangesandhavetobestrictlyadheredto.Thiswillbeallowedforgenuineandbonafidetransactions.
This is in line with the safeguards introduced by US for insiders….
44. SEBI’s Decision pertaining to Disclosures to be made
TakingintoconsiderationtheinterestofshareholdersatlargeandtoremovetherecurrenceofdisclosureswiththesoleintenttoalignInsiderTradingRegulationswiththeTakeoverRegulations,disclosureofanychangeof2%forpersonsholdingmorethan5%sharesorvotingrightsareproposedtobedispensedwith.
45.
46. G Jayaraman Vs. SEBI [2014] 120CLA78(SAT)
•Mr.Gjayaraman(Appellant)wastheCOandMr.B.RamalingaRajuistheChairmanofSatyam(“thecompany”).
•Insidertradingtransaction:-Mr.B.RamalingaRajucalledappellanttohisresidenceandinformedthatasChairmanofSatyamhewascontemplatingacquisitionoftwocompaniesviz.MaytasPropertiesLimitedandMaytasInfraLimited(UPSI). ThusAppellantasComplianceOfficerofconcernedCompanybeingprivytounpublishedpricesensitiveinformation,oughttohavekepttradingwindowclosed. However,Appellanthadfailedtoclosetradingwindowduringaboveperiod.
TheHon’bleSATheldthat
-ComplianceOfficerwasmandatorilyobligedunderModelCodetokeeptradingwindowclosedwheninpossessionofpricesensitiveinformationspecifiedinpara3.2.3ofModeCode.
-Onceitisfoundthatpersonoccupyinghighrankingpositionhasfailedtocomplywithregulations,thenheisliableforpenalty.Hencepenaltyof5LacimposedbySEBIisjustified
48. Rajiv B. Gandhi, Sandhya R. Gandhi & Amishi B. Gandhi Vs. SEBI [2008] 84 SCL 192(SAT)
•Facts:RajivB.Gandhi(Gandhi)appellantNo.1istheCompanySecretaryandChiefFinancialOfficerofWockhardtLimited(forshortthecompany).SandhyaGandhiappellantNo.2ishiswifeandAmishiGandhi(appellantNo.3)ishissister.
•Insidertradingtransaction:-Theappellantshadsold3600shareson21.1.1999(beforetheboardmeetingheldonApril22,1999at11.30a.mcalledfordemerger)and22.1.1999(inthefirsthalfhourbeforethemarketcouldreacttothenews)onthebasisofunpublishedpricesensitiveinformation.
AOheldthemInsiders&imposedafineofRs5Leach.
TheHon’bleSATheldthat
–Thewords“onthebasisof”aresignificantandmeanthatthetradesexecutedshouldbemotivatedbytheinformationinpossessionoftheinsider
–Factsnecessarytoestablishthecontrarybeingespeciallywithintheknowledgeoftheinsider,theburdenofprovingthosefactsisuponhim.
–SATupheldAO’sorder.
49. Conversion of Listing Agreements into Regulations-
SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2014
(LODR)
50. Ambit of Listed Companies as per Companies Act, 2013
A company which has any of its securities listed on any recognized stock exchange.
Meaning thereby
Thecompanyevenifhavingitsdebentures/preferencesharelistedonanyrecognizedstockexchangeisnowdeemedtobeconsideredastheListedCompany.
52. Securities proposed to be covered under LODR??
oSpecifiedSecurities(includingequityandconvertibles)-ListedonMainBoard&SMEPlatform
oNon-ConvertibleDebtSecurities
oNon-ConvertibleRedeemablePreferenceShares
oIndianDepositoryReceipts
oSecuritisedDebtInstruments
oUnitsissuedbyMutualFundsScheme
53. Main Highlights of LODR
oMandatoryfilingonStockExchangesthroughelectronicplatform;
oMandatoryappointmentofCompanySecretaryascomplianceofficerexceptforunitsofMutualFundslistedonStockExchanges;
oIntroductionofconceptoffilingInformationMemorandumonanannualbasis;
oIncorporatingintheproposedRegulations,mandatetoregisterinSCORESforredressalofinvestorgrievances;
oApplicabilityofequitysegmentprovisionsontheentitieswhohaveonlydebtsecuritieslisted.Foreg:FilingofFormBasrequiredtobefiledalongwithAnnualReportonanannualbasis
oNecessitytoexecuteshortenedversionofListingAgreementwithin6monthsofnotificationoftheseregulations.
55. Extant procedure
Formal SCN
Suomotto, Consent applications
OR
This was resulting in delay in conclusion of proceedings and resultant wastage of resources
56. PROPOSED PROCESS OF SETTLEMENT OF ADMINISTRATIVE AND CIVIL PROCEEDINGS
Solution Proposed by SEBI (Well’s Notice) In minor violations, before the issuance of the SCN, an intimation be sent to the Noticee, informing him of the impending enforcement action.
Thus, enabling them to seek settlement of proceedings or make voluntary submissionseven prior to the SCN
The name "Wells notice" is derived from the Wells Committee of the SEC, on the name of its Chairperson, John A. Wells