{"id":228468,"date":"2023-02-24T20:44:17","date_gmt":"2023-02-24T15:14:17","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=228468"},"modified":"2023-02-24T20:44:17","modified_gmt":"2023-02-24T15:14:17","slug":"disclosure-gains-sebis-proposal-on-listing","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/disclosure-gains-sebis-proposal-on-listing\/","title":{"rendered":"Disclosure gains \u2013 SEBI\u2019s Proposal on listing"},"content":{"rendered":"\n

Source<\/strong>: This post is based on the article \u201cDisclosure gains\u201d, published in Business Standard on 24th<\/sup> Feb, 2023.<\/p>\n

Syllabus Topic<\/strong>: GS Paper 3, India Economy \u2013 Financial Market<\/p>\n

News:<\/strong> The Securities and Exchange Board of India (SEBI) has proposed to tweak disclosure norms to improve transparency and streamline processes.<\/p>\n

Amendments are connected to various aspects of SEBI Issue of Capital and Disclosure Requirements, or ICDR Regulations 2018.<\/p>\n

Aspects included:<\/strong><\/p>\n

    \n
  1. Underwriting public issues,<\/li>\n
  2. The preconditions for announcing a bonus,<\/li>\n
  3. The eligibility of pension funds to participate as anchor investors,<\/li>\n
  4. Providing material documents and contracts for inspection in the case of a public issue.<\/li>\n<\/ol>\n

    What are the changes proposed?<\/strong><\/h2>\n

    Underwriters<\/strong>: First, presently, investors don\u2019t know, if appointment of underwriters is on a \u201csoft\u201d or \u201chard\u201d basis. Soft basis means underwriter is only handling the technical rejections. Hard basis means underwriter will have to pick up a stake in the company, in case of under-subscription.<\/p>\n

    A hard commitment means underwriter has a stake and believes that the share price valuations are fair.<\/p>\n

    Proposed change: Any agreement with the underwriters regarding under-subscription and few related information should be mentioned in Red Herring Prospectus (RHP). It would give investors an idea of the underwriters\u2019 commitment and fair valuation.<\/p>\n

    Bonus Shares<\/strong>: Bonus issues involve capitalisation of reserves or profits. However, it is seen sometimes that companies have not fulfilled the conditions of issuing bonus shares. For example, the company may have outstanding employee stock options or convertible debentures.<\/p>\n

    Proposed change: company should be allowed to issue a bonus only if it has received in-principal approval for all prior issues, including employee stock options and convertible debentures\/warrants.<\/p>\n

    Pension funds:<\/strong> pension funds that are associates of the lead manager (LM) or sponsored by an associate of the LM may not participate as anchor investors.<\/p>\n

    Proposed change: If a pension fund hold a minimum corpus of Rs 25 crore, it should be allowed to participate as anchor investor.<\/p>\n

    Reports: <\/strong>Presently, material documents and industry reports are available at the issuer\u2019s registered office only for a physical inspection.<\/p>\n

    Changes proposed: The papers should be available online, at the issuer\u2019s website.<\/p>\n","protected":false},"excerpt":{"rendered":"

    Source: This post is based on the article \u201cDisclosure gains\u201d, published in Business Standard on 24th Feb, 2023. Syllabus Topic: GS Paper 3, India Economy \u2013 Financial Market News: The Securities and Exchange Board of India (SEBI) has proposed to tweak disclosure norms to improve transparency and streamline processes. Amendments are connected to various aspects… Continue reading Disclosure gains \u2013 SEBI\u2019s Proposal on listing<\/span><\/a><\/p>\n","protected":false},"author":10320,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,9],"tags":[10503,216],"class_list":["post-228468","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-business-standard","tag-gs-paper-3","entry"],"jetpack_featured_media_url":"","views":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/228468","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10320"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=228468"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/228468\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=228468"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=228468"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=228468"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}