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February 17, 2023
Summary of the Master Circular issued by SEBI on 16/02/2023
This circular is integrated in our free-to-use website ca2013.com. Click here to view the SEBI Circular.
SEBI notifies a Master Circular for procedures and formats under the Takeover Regulations whereby the related standalone circulars stand rescinded
Key highlights of the circular:1. The Circular details the disclosures and reports that are required to be submitted with the Stock Exchange, SEBI or the Target Company in case of acquisitions that trigger an open offer, those that are exempt from the obligation to make an open offer, about acquisitions made by the acquirer / persons acting in concert (PACs) during the Offer Period, disposal of shares; encumbrance of shares, any invocation / release of such encumbrances to the Stock Exchanges.
2. The following provisions already in effect from July 1, 2022 have also been included:
- All encumbrances on shares of the target company shall necessarily be recorded in the depository system
- All disclosures for the transactions undertaken in the depository system when any acquirer, together with persons acting in concert with him, acquiring shares or voting rights in a target company
Only following transactions may be filed manually with the Depositories:- Triggering of disclosure requirement due to acquisition or disposal of the shares (aggregates to 5 % or more of the shares/voting rights of the target company), by the acquirer together with PACs
- Triggering of disclosure requirement as above in case the shares are held in physical form by the acquirer and/or PACs
- Listed companies who have not provided PAN of promoter(s) including member(s) of the promoter group to the designated depository or companies which have not appointed any depository as their designated depository
3. In case an acquirer or any PAC with the acquirer under the offer is not eligible to acquire shares through stock exchange due to operation of any other law, such offers would follow the existing “tender offer method”4. The circular also details the facility for acquisition of shares through Stock Exchange mechanism pursuant to offer, the basis of acceptance by the Stock Exchanges and exemption for cases involving Trust as Acquirer.5. Additional disclosures required in Detailed Public Statement, Letter of Offer for Takeover Regulations are:- Name and address of the stock broker appointed by the Acquirer/Company;
- Name of the Recognised Stock Exchanges with nationwide trading terminals where the Acquisition Window shall be available including the name of the Designated Stock Exchange;
- Methodology for placement of orders, acceptances and settlement of shares held in dematerialised form and physical form;
- Details of the special account opened with Clearing Corporation
6. Documents like public announcement, detailed public statement, draft letter of offer, letter of offer shall be filed by the Merchant Bankers through online mode only through SEBI Intermediary Portal.7. The formats for the following have been notified:- Public Announcement, Detailed Public Statement, Letter of Offer, Pre-Offer Advertisement, Post Offer Advertisement, Recommendations of the Committee of Independent Directors, Post-Open Offer Report, Disclosure by acquirer for shares/ voting rights acquired during the offer period
- Standard format for filing of application to SEBI seeking exemption by the acquirer from the obligation to make an open offer
- Reporting related to encumbrance of shares
- Other Disclosure on acquisitions and disposals by acquirer and PAC
CAIRR Update February 17, 2023
About the Author: Eti Basaniwal
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