Corporate Law Daily
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Today’s newsletter analytically summarizes the top Corporate Law stories reported at?taxmann.com .
The SEBI has notified the SEBI (Issue of Capital and Disclosure Requirements) (Fourth Amendment) Regulations, 2022. A new Chapter IIA has been inserted, providing provisions relating to the Initial Public Offer (IPO) on the main board through the pre-filling of a draft offer document, Interaction with qualified institutional buyers, and General Conditions. Before this amendment, it was mandatory for an issuer to file copies of draft offer documents with the concerned regional office of the Board. Later, which was kept open for issuing observations by the Board and was also kept open for public opinions and observations.
SEBI has also allowed issuers to interact with qualified institutional buyers for limited marketing of the intended issue from the time of pre-filing the draft offer document till the Board issues any observations. In case the issuer interacts with the QIBs, the issuer and lead manager(s) shall prepare a list of the qualified institutional buyers who have participated in such interaction(s).
Further, new regulations 162A and 173A require an arrangement of CRAs as a Monitoring agency to monitor the use of proceeds where the issue size exceeds 100 Cr.
This amendment will help companies keep their offer documents private until they firm up their IPO plan. The offer documents will be open to scrutiny from the regulators and exchanges but won't be open to the public i.e., it won’t be getting uploaded in Board’s website. The company will then have to file an updated DRHP, which will be a public document.
The norms further provide that if the issuer interacts with the QIBs, the issuer and lead manager(s) shall prepare a list of the qualified institutional buyers who have participated in such interaction(s).
Earlier RBI issued Circular no. dated June 09, 2014, on ‘Basel III Framework on Liquidity Standards – Liquidity Coverage Ratio (LCR), Liquidity Risk Monitoring Tools and LCR Disclosure Standards’ and Press Release no. dated April 08, 2022, on operationalizing of Standing Deposit Facility (SDF).
Various queries were received from the banks about the treatment of SDF. Accordingly, the RBI has advised that overnight balances held by the banks with RBI under SDF shall be eligible as ‘Level 1 High-Quality Liquid Assets (HQLA)’ for computation of LCR.
This circular applies to all Commercial Banks (excluding Local Area Banks, Regional Rural Banks and Payments Banks). Further, the circular shall come into force with an immediate effect.
SEBI has found that certain schemes of Alternative Investment Funds (AIFs) have adopted a distribution waterfall in such a way that one class of investors (other than sponsor/manager) share loss more than pro rata to their holding in the AIF since the latter has priority in distribution over former (‘priority distribution model’).
Accordingly, the SEBI has decided that such schemes of AIFs with a priority distribution model shall not accept any fresh commitment or make an investment in a new investee company till a view is taken by the board in this regard. This circular shall come into force with an immediate effect.
That’s it from us for today! Stay Tuned for more updates from?Taxmann.com
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