Master Circular on Scheme of Arrangement by Listed Entities and Relaxation under Sub-rule (7) of rule 19 of the Securities Contracts (Regulation) Rules, 1957

SEBI/HO/CFD/POD-2/P/CIR/2023/93 · 2023-06-20 · SEBI Corporation Finance Department

Summary

This part of the document establishes a Master Circular consolidating requirements for schemes of arrangement by listed entities and relaxations under SCRR Rule 19(7). It rescinds previous circulars while preserving rights, liabilities, and pending applications under those rescinded rules. The text outlines preliminary obligations for listed entities and stock exchanges, referencing specific SEBI regulations and pricing provisions. This part outlines the pre-sanction requirements for schemes of arrangement, including the designation of a stock exchange and mandatory document submissions. It specifies conditions for schemes involving unlisted entities, such as disclosure formats and minimum public shareholding thresholds. Additionally, it details the requirements for valuation reports and auditor certificates to ensure compliance with accounting standards. This section mandates the submission of complaint reports and unpaid dues reports to stock exchanges prior to obtaining observation letters. It requires listed entities to disclose specific documents on their websites and include observation letters in shareholder notices. Additionally, it establishes strict e-voting requirements

Text

With the issuance of this Master Circular, the directions/instructions contained in the Circulars listed out in Schedule I to this Master Circular shall stand rescinded.

Anything done or any action taken or purported to have been done or taken under the rescinded circulars, prior to such rescission, shall be deemed to have been done or taken under the corresponding provisions of this Master Circular;

any application made to SEBI under the rescinded circulars, prior to such rescission, and pending before it shall be deemed to have been made under the corresponding provisions of this Master Circular;

the previous operation of the rescinded circulars or anything duly done or suffered thereunder, any right, privilege, obligation or liability acquired, accrued or incurred under the rescinded circulars, any penalty, incurred in respect of any violation committed against the rescinded circulars, or any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty as aforesaid, shall remain unaffected as if the rescinded circulars have never been rescinded;

comply with the conditions laid down in this circular;

bring the provisions of this circular to the notice of listed entities/ issuers of listed Non-Convertible Securities, Securitised debt instruments, and/ or Commercial Paper;

disseminate the provisions of the circular on their website;

put in place necessary systems and infrastructure for implementation of this circular;

monitor compliance with the provisions of the circular

make consequential changes, if any, to their respective bye-laws; and communicate and create awareness amongst the stakeholders.

SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as “listing regulations”) place obligations with respect to Scheme of Arrangement on Listed Entities and Stock Exchange(s) in Regulation 11, 37 and 94.

Regulation 37 of listing regulations provides that the listed entities desirous of undertaking scheme of arrangement or involved in a scheme of arrangement shall file the draft scheme with Stock Exchange(s) for obtaining Observation Letter or No-objection Letter, before filing such scheme with any court or Tribunal.

Source: SecMarx — Master Circular on Scheme 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.