INDIA: SEBI streamlines process for acquisition of shares pursuant to tender-offers during takeovers, buy-back and delisting of securities

Tuesday December 13 2016

The Securities and Exchange Board of India (SEBI) have issued Circular CFD/DCR2/CIR/P/2016/131, streamlining the process for the acquisition of shares pursuant to tender-offers made during takeovers, buy-back and delisting of securities.

Currently, the shareholders submit bids through stock brokers, and subsequently the brokers transfer the shares to the special account of the clearing corporation. Likewise, the consideration payable to shareholders for the shares accepted in the offer are routed through stock brokers. Also, the shares not accepted in the offer are returned to shareholders through the stock brokers.

It has now been decided in consultation with the stock exchanges and depositories that transfer of shares under the tender offers would be made directly to the account maintained by the clearing corporation. After such transfer of securities, the clearing corporation will be allowed to utilise the securities towards the settlement obligations under such offers. Consideration for the accepted shares in the tender offer and shares tendered but not accepted under such offer would be credited directly to shareholders` bank and demat accounts respectively.

The said revised procedure shall be applicable to all offers for which a public announcement is made on or after January 02, 2017.

The amendments to the procedure have been implemented by changes to regulation 13(1A) of Delisting Regulations, regulation 9(3A) of Buy Back Regulations and regulation 18(6A) of Takeover Regulations as amended.

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