SEBI (ICDR) Regulations Simplified on basis of offering of Securities

SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 (“Old ICDR Regulations”) were notified in the year 2009. Due to the need to review and realign the Old ICDR Regulations with the recent developments in the security market and to bring the Regulations in alignment with other currently applicable laws, SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 were released on September 11, 2018 (“ICDR Regulations”).

The key changes brought by ICDR Regulations in Old ICDR Regulations are as follows:

  • All the chapters in ICDR Regulations have been categorized on the basis of the type of offering (initial public offering, rights issue, further public offer, preferential issue, qualified institutional placement and so on) so that all relevant information pertaining to a particular type of offering are available at one place;
  • The procedural requirements have been specified through Schedules separately;
  • The provisions of Companies Act, 1956 (wherever applicable), Companies Act, 2013, SEBI (Substantial Acquisition & Substantial Takeover) Regulations, 2011, SEBI (Share Based Employee Benefits) Regulations, 2014 have been suitably incorporated.
  • Various informal guidance /interpretative letters/ frequently asked questions/ circulars regarding interpretation of various provisions of the regulations issued by SEBI from time to time have been suitably incorporated.
  • Some of the changes specifically related to rights issue are mentioned below:
    • The applicability requirement of the regulations has been increased from the rights issue ofRs. 50 lakhs to rights issue of Rs. 10 crores.
    • Definition of Draft letter of offer inserted.
    • In the case of Issue of warrants, the flexibility to attach more than one specified security has been provided.
    • Only Applications Supported by Blocked Amount facility are permitted to be made in usual cases.
    • The need to file Draft letter of offer is done away with in case of Fast Track Issue.