Schemes of Arrangement by Listed Entities and Relaxation under Sub-rule (7) of Rule 19 of the Securities Contracts (Regulation) Rules, 1957
Summary
This circular amends the framework for Schemes of Arrangement by requiring listed entities to settle outstanding dues to SEBI, stock exchanges, and depositories before filing draft schemes. It mandates the submission of a 'Report on Unpaid Dues' in a specified format if any dues remain unpaid prior to obtaining an observation letter from stock exchanges. Stock exchanges are directed to forward these reports to SEBI and disseminate the circular's provisions to listed companies.
Text
SEBI Circular No. CFD/DIL3/CIR/2017/21 dated March 10, 2017 has laid down the framework for Schemes of Arrangement by listed entities and relaxation under Rule 19(7) of the Securities Contracts (Regulation) Rules, 1957.
In order to streamline the processing of draft schemes, it has been decided to seek additional information further, at one go. The amendment to the Circular No. CFD/DIL3/CIR/2017/21 dated March 10, 2017, in relation to payment of outstanding dues of SEBI, Stock exchanges and the Depositories is as provided in the Annexure
bring the provisions of this circular to the notice of the listed companies and also to disseminate the same on their website.
communicate to SEBI the status of implementation of the provisions of this circular through monthly development report.
This circular is issued in exercise of powers conferred by Section 11(1) of the Securities and Exchange Board of India Act, 1992 and Regulations 11, 37 and 94 read with Regulation 101(2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Rule 19(7) of Securities Contracts (Regulation) Rules, 1957 to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.
All listed entities shall ensure that all dues to, and/or fines/penalties imposed by SEBI, Stock Exchanges and the Depositories have been paid/settled before filing the draft scheme with the designated stock exchange.
In case of unpaid dues / fines / penalties, the listed entity shall submit to stock exchanges a ‘Report on the Unpaid Dues’ which shall contain the details of such unpaid dues in the format given in Annexure B to this Circular, prior to obtaining Observation Letter from stock exchanges on the draft scheme.
The report on unpaid dues as mentioned above, shall be submitted by listed entity to the stock exchanges along with the draft scheme.
Any misstatement or furnishing of false information with regard to the said information shall make the listed entity liable for punitive action as per the provisions of applicable laws and regulations.
The ‘Unpaid Dues Report’ shall be forwarded by the Stock Exchanges to SEBI before SEBI communicates its comments on the Draft Scheme to the Stock Exchanges. Such report shall be submitted as per the format specified at Annexure B.
Source: SecMarx — Schemes of Arrangement by Listed Entities and Relaxation under Sub-rule (7) of Rule 19 of the Securities Contracts (Regulation) Rules, 1957. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.