SEBI Circular on Streamlining Process of Rights Issue

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Jun 30, 2022

SEBI Circular on Streamlining Process of Rights Issue

SEBI, by way of a Circular dated January 22, 2020 (‘January Circular’), stipulated the procedures for streamlining the rights issue process. Our write-up on this circular can be accessed here. SEBI, by way of a Circular dated May 19, 2022, has amended the above-mentioned circular as follows:

i. The words ‘at least four days’ appearing in Paragraphs 1.4.1 and (C)(e) in Annexure I of the January Circular, relating to minimum time period between closure of trading of rights entitlements (‘REs’) on stock exchange platform and closure of rights issues, are replaced with ‘at least three working days’; and

ii. The change has been done to ensure adequate days for settlement as a minimum of two working days are required for the settlement of REs traded on the last day of the REs trading window. There was a possibility of trading holidays between the last date of REs trading date and issue closure in the earlier position.

This Circular is applicable for all rights issues and fast-track rights issue from the date of its issuance.

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