Master Circular on issuance of No Objection Certificate (NOC) for release of 1% of Issue Amount
Summary
This circular mandates that issuers deposit 1% of the issue size with the designated stock exchange before opening subscription, which is released only after obtaining a No Objection Certificate from SEBI. The application for this NOC must be submitted by the Post Issue Lead Merchant Banker two months after listing and requires confirmation that all ASBA accounts are unblocked and complaints are resolved. The document also rescinds previous circulars while preserving pending actions and liabilities under those earlier regulations. Paragraph 12 mandates additional compliance steps for balances in refund or escrow accounts, including issuing reminders and furnishing specific certifications. Annexure B outlines the jurisdictional mapping of SEBI regional offices to Indian states for processing NOC applications. Annexure C prescribes a strict proforma for Action Taken Reports (ATR) regarding investor grievances, detailing instrument and despatch information.
Text
the issuer, before the opening of the subscription list, is mandated to deposit with the designated stock exchange (DSE), 1% of the issue size available for subscription to the public. This amount of 1% shall be released to the issuer after obtaining the NOC from SEBI.
For the purpose of obtaining the NOC from SEBI, the issuer is required to submit an application on its letter head addressed to SEBI in the format specified in Annexure – A, after the expiry of 2 months from the date of listing on the latest stock exchange which permitted listing.
The application for NOC shall be filed by the Post Issue Lead Merchant Banker (PILMB), provided that all issue related complaints have been resolved by the PILMB/ issuer, with the concerned designated office of SEBI under which the registered office of the issuer falls, as specified in Annexure – B.
On the date of application for NOC, the bank guarantees, if any, which form part of the 1% deposit by issuer shall have a residual validity of minimum of 2 months.
The PILMB shall submit a certificate confirming that all the Self-Certified Syndicate Banks (SCSBs) involved in Application Supported by Blocked Amount (ASBA) have unblocked ASBA accounts. The application for NOC shall be considered incomplete by SEBI if the application for NOC is not accompanied by a confirmation by PILMB that all the accounts in ASBA have been ‘unblocked’.
SEBI shall issue the NOC after satisfying itself that the complaints arising from the issue received on SEBI Complaint Redress System (SCORES) against the issuer have been resolved to its satisfaction, the issuer has been submitting Action Taken Reports on the complaints in the format as specified in Annexure – C and the fees due to intermediaries associated with the issue process including ASBA Banks have been paid by the issuer.
All companies whose securities are listed on the stock exchanges and all registered merchant bankers are advised to comply with the aforesaid terms and conditions.
The Stock Exchanges are accordingly advised to: i. bring the provisions of this circular to the notice of all the companies whose securities are listed in the exchange and also to disseminate the same on the website of the stock exchange. ii. make amendments to the relevant bye-laws, rules and regulations for the implementation of the terms of this circular, if necessary.
This Circular rescinds the following circulars/directions issued by SEBI in this regard till date and shall come into force from the date of its issue: i. Circular no. OIAE/Cir-1/2009 dated November 25, 2009 ii. Circular no. CIR/OIAE/001/2015 dated November 30, 2015 iii. Circular no. SEBI/HO/OIAE/IGRD/CIR/P/2021/588 dated July 05, 2021
Notwithstanding such rescission, a. anything done or any action taken or purported to have been done or taken under the rescinded circulars, prior to such rescission, shall be deemed to have been done or taken under the corresponding provisions of this Master Circular; b. any application made to the Board under the rescinded circulars, prior to such rescission, and pending before it shall be deemed to have been made under the corresponding provisions of these regulations; c. the previous operation of the rescinded circulars... shall remain unaffected as if the rescinded circulars has never been rescinded;
This Circular is issued in exercise of powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992 to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.
Arrange to issue two reminders to all the applicants whose funds / securities are lying in the refund account / escrow account, with a gap of one month... furnish information as per tables below... submit copies of two specimens of the letters sent, proof of their despatch and a fresh Refund Bankers certificate / DP statement
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Source: SecMarx — Master Circular on issuance of No Objection Certificate (NOC) for release of 1% of Issue Amount. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.