Issue_and_Listing_of_Non_Convertible_Redeemable_Preference_Shares_May25_2016
4 (1) No issuer shall make any public issue of non-convertible redeemable preference shares if as on the date of filing of draft offer document or final offer document as provided in these regulations:(a) the issuer or the person in control of the issuer or its promoter or itsdirector is restrained or prohibited or debarred by the Board fromaccessing the securities market or dealing in securities ; or(b) the issuer or any of its promoters or directors is a wilful defaulter or it is indefault of payment of interest or repayment of principal amount in respectof non-convertible redeemable preference shares issued by it to the public,if any, for a period of more than six months.]
4 (2) No issuer shall make a public issue of non-convertible redeemable preference shares unless thefollowing conditions are satisfied, as on the date of filing of draft offer document and final offer document as provided in these regulations, -(a)it has made an application to one or more recognized stock exchangesfor listing of such securities therein:Provided that where the application is made to more than one recognizedstock exchanges, the issuer shall choose one of them as the designatedstock exchange:Provided further that where any of such stock exchanges have nationwide trading terminals, the issuer shall choose one of them as the designated stock exchange;different stock exchange as a designated stock exchange subject to therequirements of this regulation;(b)it has obtained in-principle approval for listing of its non-convertible. Prior to substitution, sub-regulation(1) read as under:―(1) No issuer shall make any public issue of non-convertible redeemable preference shares if as on thedate of filing of draft offer document and final offer document as provided in these regulations, the issuer or the promoter of the issuer , has been restrained or prohibited or debarred by the Boardfrom accessing the securities market or dealing in securities and such direction or order is in force.‖5redeemable preference shares on the recognized stock exchangeswhere the application for listing has been made;(c)it has obtained a credit rating from at least one credit rating agencyregistered with the Board and is disclosed in the offer document :Provided that where credit ratings are obtained from more than one creditrating agencies, all the ratings, including the unaccepted ratings, shall bedisclosed in the offer document ;(d)it has entered into an arrangement with a depository registered with the Boardfor dematerialization ofthe non-convertible redeemablepreference shares that are proposed to be issued to the public, inaccordance with the Depositories Act, 1996 and regulations madethereunder;(e)the minimum tenure of the non-convertible redeemable preference sharesshall not be less than three years; and(f)the issue has been assigned a rating of not less than ―AA-‖ orequivalent by a credit rating agencyregistered with the Board.
4 (3) The issuer shall create acapital redemption reserve in accordance with the provisions of the Companies Act, 1956 ;
4 (4) The issuer shall not issue non-convertible redeemable preference shares for providing loan to or acquisition of shares of any person who is part of the same group or who is under the same management, other than to subsidiaries of the issuer; Group" and "under the same management" shall have the same meaning as provided in the explanation to regulation 23 of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009.
4 (5) In case of public issue of non-convertible redeemable preference shares,
5 (1)The offer document shall contain all material disclosures which are necessary for the subscribers ofthe non -convertible redeemablepreference shares to take an informed investment decision .
5 (2) Without prejudice to the generality of sub-regulation (1), the issuer and thelead merchant banker shall ensure that the offer document contains the following:(a)the disclosures specified in Schedule II of the Companies Act,1956;(b)disclosure specified in Schedule I of these regulations ; and additional disclosures as may be specified by the Board.is likely to impact an investor‘s investment decision.
6 (1) No issuer shall make a public issue of' non-convertible redeemablepreference shares unless a draft offer document hasbeen filed with the designated stock exchange through the lead merchant banker .
6 (2)The draft offer document filed with the designated stock exchange shall bemade public by posting the same on the website of the designated stock exchange forseeking public comments for a period of seven working days from the date of filingthe draft offer document with such exchange.
6 (3)The draft offer document may also be displayed on the website of theissuer, merchant bankers and the stock exchanges where the non-convertible redeemable preference shares are proposed to be listed.
6 (4)The lead merchant banker shall ensure that the draft offer document clearly specifies the names and contact particulars of the compliance officer of the lead merchant banker and the issuer including the postal and emailaddress, telephone and fax numbers.
6 (5)The lead merchant banker shall ensure that all comments received on thedraft offer document are suitably addressed prior to the filing of the offer document with the Registrar of Companies .
6 (6)A copy of draft and final offer document shall also be forwarded to the Board for its records,along with fees as specified in Schedule III simultaneously with filing of these documents with designated stock exchange .
6 (7)The lead merchant banker shall, prior to filing of the offer document withthe Registrar of Companies , furnish to the Board a due diligence certificate as perSchedule II of these regulations .
7 (1)The draft and final offer document shall be displayed on the websites ofstock exchanges and shall be available for download in PDF /HTML formats.
7 (2)The offer document shall be filed with the designated stock exchange,simultaneously with filing thereof with the Registrar of Companies, fordissemination on its website prior to the opening of the issue .
7 (3) Where any person makes a request for a physical copy of the offer document, the same shall be provided to him by the issuer or lead merchantbanker.
8 (1)The issuer shall make an advertisement in one English national daily newspaper and one Hindi national daily newspaper with wide circulation at theplace where the registered office of the issuer is situated, on or before the issueopening date and such advertisement shall, amongst other things, contain thedisclosures as per Schedule I.
8 (2)No issuer shall issue an advertisement which is misleading in materialparticulars or which contains any information in a distorted manner or which ismanipulative or deceptive.
8 (3)The advertisement shall be truthful, fair and clear and shall not contain astatement, promise or forecast which is untrue or misleading.
8 (4)(5)The credit rating shall be prominently displayed in the advertisement.Any advertisement issued by the issuer shall not contain any matters whichare extraneous to the contents of the offer document. 8(6)The advertisement shall urge the investors to invest only on the basis ofinformation contained in the offer document.
8 (7)Any corporate or product advertisement issued by the issuer during thesubscription period shall not make any reference to the issue of non-convertible redeemable preference shares or be used for solicitation.
9 (1)The issuer and lead merchant banker shall ensure that:(a)every application form issued by the issuer is accompanied by acopy of the abridged prospectus;(b)the abridged prospectus shall not contain matters which areextraneous to the contents of the prospectus;(c)adequate space shall be provided in the application form to enablethe investors to fill in various details like name, address, etc.
9 (2)The issuer may provide the facility for subscription of application in
10 An issuer proposing to issue non-convertible redeemable preference shares to the public through the on-line system of the designated stock exchange shall comply with the relevant applicable requirements as may be specified by the Board.
11 The issuer may determine the price of non-convertible redeemable preference shares in consultation with the lead merchant bankers and the issue may be at fixed price or the price may be determined through book building process in accordance with the procedure as may be specified by the Board.
12 The issuer shall redeem the non-convertible redeemable preference shares in terms of the offer document.
13 (1)The issuer may decide the amount of minimum subscription which itseeks to raise by public issue of non-convertible redeemable preference sharesin accordance with the provisions of Companies Act, 1956 and disclose thesame in the offer document.
13 (2)In the event of non-receipt of minimum subscription, all applicationmoneys received in the public issue shall be refunded forthwith to the applicants.In the event the application monies are refunded beyond eight days from the lastday of the offer, then such amounts shall be refunded together with interest atsuch rate as may be set out in the offer document which shall not be less thanfifteen per cent per annum.
14 A public issue of non-convertible redeemable preference shares may be underwritten by an underwriter registered with the Board and in such a case adequate disclosures regarding underwriting arrangements shall be made in the offer document.
15 (1)The offer document shall not omit disclosure of any material fact whichmay make the statements made therein, in light of the circumstances underwhich they are made, misleading.
15 (2)The offer document or abridged prospectus or any advertisement issued byan issuer in connection with a public issue of non-convertible redeemable
16 (1)An issuer desirous of making an offer of non-convertible redeemablepreference shares to the public shall make an application for listing to one or morerecognized stock exchanges in terms of sub-section (1) of section 73 of the10Companies Act, 1956.
16 (2)The issuer shall comply with conditions of listing of such non-convertible redeemable preference shares as specified in the Listing Agreement with the stockexchange where such non-convertible redeemable preference shares are sought tobe listed.
16 (3) Where the issuer has disclosed the intention to seek listing of non-convertible redeemable preference shares issued on private placement basis, theissuer shall forward the listing application along with the disclosures specified inSchedule I to the recognized stock exchange within fifteen days from the date ofallotment of such non-convertible redeemable preference shares .
16A (1) Every issuer desirous of listing its non-convertible redeemable preference shares , or perpetual non-cumulative preference shares or innovative perpetual debt instruments on a recognised stock exchange, shall execute an agreement with such stock exchange.
16A (2) Every issuer which has previously entered into agreements with a recognised stock exchange to list non-convertible redeemable preference shares, or perpetual non-cumulative preference shares or innovative perpetual debt instruments shall execute a fresh listing agreement with such stock exchange within six months of the date of notification of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.
16B (1) The issuer shall deposit, before the opening of subscription list, and keep deposited with the stock exchange(s) an amount calculated at the rate of one percent. of the amount of securities offered for subscription to the public.
17 (1) An issuer may list its non-convertible redeemable preference sharesissued on private placement basis on a recognized stock exchange subject to thefollowing conditions:(a)the issuer has issued such non-convertible redeemablepreference sharesin compliance with the provisions of the CompaniesAct,1956, rules prescribed thereunder and other applicable laws;(b)credit rating has been obtained in respect of such non-convertible redeemable preference shares from at least one credit rating agencyregistered with the Board:Provided that where credit ratings are obtained from more than onecredit rating agencies, all the ratings shall be disclosed in the offer document;(c)the non-convertible redeemable preference shares proposed to belisted are in dematerialized form;(d)the disclosures as provided in regulation 18 have been made;(e)the minimum application size for each investor is not less than tenlakh rupees;and(f)the issue is in compliance with sub-regulation (3) and (4) ofregulation 4.6[(g) where the application is made to more than one recognised stockexchange, the issuer shall choose one of them as the designated stockexchange.](2)The issuer shall comply with conditions of listing of such non-convertible redeemable preference shares as specified in the Listing Agreement with the stockexchange where such non-convertible redeemable preference shares are sought tobe listed.12
18 (1)The issuer makingaprivateplacementofnon-convertible redeemablepreference shares and seeking listing thereof on a recognized stock exchange shall make disclosures as specified in Schedule I of these regulations accompanied by the latest Annual Report of the issuer .
18 (2)The disclosures as provided in sub-regulation (1) shall be made on the websites of stock exchanges where such securities are proposed to be listed and shallbe available for download in PDF / HTML formats.Relaxation of strict enforcement of rule 19 of Securities Contracts (Regulation)
19 In exercise of the powers conferred by sub-rule (7) of rule 19 of the Securities Contracts (Regulations) Rules, 1957, the Board hereby relaxes the strict enforcement of sub-rules (1) and (3) of rule 19 of the said rules in relation to listing of non-convertible redeemable preference shares issued by way of a
20 (1) All the issuers making public issues of non-convertible redeemablepreference shares or seeking listing of non-convertible redeemable preferenceshares issued on private placement basis shall comply with the conditions oflisting specified in the respective listing agreement for non-convertible redeemable preference shares .
21 (1)The non-convertible redeemable preference shares issued to the publicor on a private placement basis, which are listed in recognized stockexchanges, shall be traded and such trades shall be cleared and settled inrecognized stock exchanges subject to conditions specified by the Board.
21 (2)In case of trades of non-convertible redeemable preference shares whichhave been made over the counter, such trades shall be reported on a recognizedstock exchange having a nation-wide trading terminal or such other platform asmay be specified by the Board.
21 (3)The Board may specify conditions for reporting of trades on the
22 (1)The issuer shall disclose all the material facts in the offer documentsissued or distributed to the public and shall ensure that all the disclosures madein the offer document are true, fair and adequate and there is no mis-leading oruntrue statements or mis-statement in the offer document .
22 (2)The Merchant Banker shall verify and confirm that the disclosures madein the offer documents are true, fair and adequate and ensure that the issuer is incompliance with these regulations as well as all transaction specific disclosures―(2) Each rating obtained by an issuer shall be reviewed by the registered credit rating agency atleast once ayear and any revision in the rating shall be promptly disclosed by the issuer to the stock exchange(s) wherethe non-convertible redeemable preference shares are listed.
22 (3) Any change in rating shall be promptly disseminated to investors and prospective investors in suchmanner as the stock exchange where such securities are listed may determine from time to time.‖14
23 (1) These provisions of these regulations shall, so far as they may, apply to theissuance and listing of Perpetual Non-Cumulative Preference Shares andInnovative Perpetual Debt Instruments by banks.
23 (2) No issuer other than a bank shall issue the instruments mentioned in sub-regulation (1).
23 (3) A bank may issue such instruments subject to the prior approval and incompliance with the Guidelines issued by Reserve Bank of India.
23 (4) If a bank is incorporated as a company under Companies Act, 1956, itshall, in addition, comply with the provisions of Companies Act, 1956 and/or other applicable statues.
23 (5) The bank shall comply with the terms and conditions as may be specifiedby the Board from time to time and shall make adequate disclosures in the offer document regarding the features of these instruments and relevant risk factorsand if such instruments are listed, shall comply with the listing requirements.
24 (1) Without prejudice to the provisions of sections 11 and 11C of the Act andsection 209A of the Companies Act, the Board may suomotu or upon informationreceived by it , appoint one or more persons to undertake the inspection of the books ofaccount, records and documents of the issuer or merchant banker or any otherintermediary associated with the public issue, disclosure or listing of non-convertible redeemable preference shares, as governed under these regulations, for any of thepurposes specified in sub-regulation (2).
24 (2)The purposes referred to in sub-regulation (1) may be as follows, namely:-(a)to verify whether the provisions of the Act, Companies Act, 1956, SecuritiesContracts (Regulation) Act, 1956, Depositories Act, 1996, the rules andregulations made thereunder in respect of issue of securities have been compliedwith;(b)to verify whether the requirement in respect of issue of securities as specified inthese regulations has been complied with;(c)to verify whether the requirement of listing conditions and continuousdisclosure requirement have been complied with;(d)to inquire into the complaints received from investors, other market participantsor any other persons on any matter of issue and transfer of securities governedunder these regulations;(e)to inquire into affairs of the issuer in the interest of investor protection or theintegrity of the market governed under these regulations;(f)to inquire whether any direction issued by the Board has been complied with.
24 (3) While undertaking an inspection under these regulations, the inspecting authorityor the Board, as the case may be, shall follow the procedure specified by the Board forinspection of the intermediaries.
25 (1) Without prejudice to its powers under Chapter VIA and section 24 of theAct, the Board may, in the interest of investors in securities market, issue suchdirections as it deems fit under section 11 or section 11A or section 11B or section11D of the Act including:(a) directing the issuer to refund of the application monies to the applicants in apublic issue;(b) directing the persons concerned not to further deal in securities in anyparticular manner;(c) directing the persons concerned not to access the securities market for aparticular period;(d)restraining the issuer or its promoters or directors from making furtherissues of securities;(e) directing the person concerned to sell or divest the securities;(f) directing the issuer or the depository not to give effect transfer or directingfurther freeze of transfer of securities;(g) any other direction which Board may deem fit and proper in thecircumstances of the case:Provided that the Board shall, either before or after issuing such directions,give an opportunity of being heard to the persons against whom thedirections are issued or proposed to be issued:Provided further that, if, any ex-parte direction is required to be issued, the Board may give post decisional hearing to affected person.
26 (1) The Board may by a general or special order or circular specify any conditions orrequirement in respect of issue of non-convertible redeemable preference shares .
26 (2) In particular, and without prejudice to the generality of the foregoing powerand provisions of these regulations, such orders or circulars may provide for all orany of the following matters , namely:(a) Electronic issuances and other issue procedures including the procedurefor price discovery;17(b) Conditions governing trading, reporting, clearing and settlement of tradein non-convertible redeemable preference shares; or(c) Listing conditions.
26 (3) If any special order is proposed to be issued to any particular issuer orintermediary on a specific issue, no such order shall be issued unless an
27 (1)In order to remove any difficulties in the application or interpretation ofthese regulations , the Board may issue clarifications or grant relaxations fromapplication requirement or conditions of these regulations , after recording reasonstherefor.
27 (2)The Board may, on an application made by any issuer, relax any of theprocedural requirements or conditions or strict enforcement of these regulations,if the Board is satisfied that:a.b.c.d.requirement is procedural or technical in nature; orrequirement causes undue hardship to a particular class of industryor issuers from accessing the securities market; orrelaxation is in the interest of substantial number of investors; orsuch relaxation will be in the interest of securities market.