IFSCA (Issuance and Listing of Securities) Regulations, 2021

INTERNATIONAL FINANCIAL SERVICES CENTRES AUTHORITY

NOTIFICATION

Gandhinagar, the 16th July, 2021

International Financial Services Centres Authority (Issuance and Listing of Securities) Regulations, 2021

No. IFSCA/2021-22/GN/REG015.—In exercise of the powers conferred by sub-section (1) of Section 28 read with sub-section (1) of Section 12 and sub-section (1) of Section 13 of the International Financial Services Centres Authority Act, 2019; and Section 30 and Section 11A read with Section 28C of the Securities and Exchange Board of India Act, 1992, the International Financial Services Centres Authority hereby makes the following regulations, namely:-

CHAPTER I: PRELIMINARY

Short title and commencement

1. (1) These regulations may be called the International Financial Services Centres Authority (Issuance and Listing of Securities) Regulations, 2021.

(2) They shall come into force on the date of publication in the Official Gazette.

Definitions

2. In these regulations, unless the context otherwise requires, the terms defined herein shall bear the meanings assigned to them below, and their cognate expressions shall be construed accordingly, –

(a) “Act” means the International Financial Services Centres Authority Act, 2019 (50 of 2019);

(b) “business combination” means a merger or amalgamation or acquisition of shares or assets of one or more companies having business operations;

(c) “convertible debt instrument” means an instrument which creates or acknowledges indebtedness and is convertible into equity shares of the issuer at a later date at or without the option of the holder of the instrument, whether constituting a charge on the assets of the issuer or not;

(d) “convertible securities” means securities which are convertible into or exchangeable with equity shares of the issuer at a later date, with or without the option of the holder of such securities and includes convertible debt instruments and convertible preference shares;

(e) “debt securities” means non-convertible debt securities which create or acknowledge indebtedness and includes debentures and bonds;

(f) “designated stock exchange” means a recognised stock exchange chosen by the issuer on which securities of an issuer are listed or proposed to be listed for the purpose of a particular issue of securities under these regulations;

(g) “DR” or “depository receipt” means a negotiable financial instrument representing underlying securities of a company listed in another jurisdiction;

(h) “Foreign Jurisdiction” means a country, other than India, whose securities market regulator is a signatory to International Organization of Securities Commission‘s Multilateral Memorandum of Understanding (IOSCO’s MMOU) (Appendix A signatories) or a signatory to bilateral Memorandum of Understanding with the IFSCA, and which is not identified in the public statement of Financial Action Task Force as:

i. a jurisdiction having a strategic Anti-Money Laundering or Combating the Financing of Terrorism deficiencies to which counter measures apply; or

ii. a jurisdiction that has not made sufficient progress in addressing the deficiencies or has not committed to an action plan developed with the Financial Action Task Force to address the deficiencies;

(i) “follow-on public offer” or “FPO” means an offer of specified securities by a listed issuer to the public for subscription and includes an offer for sale of specified securities to the public by any existing holders of such specified securities in a listed issuer;

(j) “green shoe option” means an option of allotting specified securities in excess of the specified shares offered in the public issue as a post-listing price stabilizing mechanism;

(k) “IFSCA” or “Authority” means the International Financial Services Centres Authority established under sub­section (1) of section 4 of the Act;

(l) “information memorandum” means listing particulars or offering memorandum or offering circular or any document that provides investors with certain information about the issuer and the securities in connection with an application for listing of securities;

(m) “initial public offer” or “IPO” means an offer of specified securities by an unlisted issuer to the public for subscription and includes an offer for sale of specified securities to the public by any existing holders of such specified securities in an unlisted issuer;

(n) “International Financial Services Centre” or “IFSC” shall have the same meaning as assigned to it under clause (g) of sub-section (1) of Section 3 of the Act;

(o) “key managerial personnel” means the officers or personnel of the issuer who are members of its core management team (excluding board of directors) and includes members of the management one level below the executive directors of the issuer, functional heads and includes ‗key managerial personnel‘ as defined under the Companies Act, 2013 or any other person whom the issuer may declare as a key managerial personnel;

(p) “lead manager” means a merchant banker appointed by the issuer to manage the issue and in case of a book built issue, the lead manager(s) appointed by the issuer shall act as the book running lead manager(s) for the purposes of book building;

(q) ―Listed Company” means a company whose specified securities or depository receipts are listed on a recognised stock exchange(s) in IFSC;

(r) ―recognised stock exchange” means a stock exchange in an IFSC recognised by the Authority;

(s) ―Special Purpose Acquisition Company” or ―SPAC” means a company which does not have any operating business and has been formed with the primary objective to affect a business combination;

(t) ―specified securities” means equity shares and convertible securities; and

(u) ―SR equity shares” means the equity shares of an issuer having superior voting rights compared to all other equity shares issued by that issuer.

3. Words and expressions used and not defined in these regulations but defined in the Act, the Companies Act, 2013, the Securities Contracts (Regulation) Act, 1956, the Securities and Exchange Board of India Act, 1992, the Depositories Act 1996, or any rules or regulations made thereunder shall have the same meanings as respectively assigned to them in those Acts, rules or regulations made thereunder or any statutory modification or re­enactment thereto, as the case may be.

Applicability

4. These regulations shall apply to:

(a) an initial public offer of specified securities by an unlisted issuer;

(b) a follow-on public offer of specified securities by a listed issuer;

(c) listing of specified securities by a start-up company or an SME company;

(d) secondary listing of specified securities;

(e) an initial public offer of specified securities by a Special Purpose Acquisition Company;

(f) rights issue and/or preferential issues by a listed issuer;

(g) listing of depository receipts;

(h) listing of debt securities;

(i) listing of ESG debt securities; and

(j) issuance and/or listing of any other securities as may be specified by the Authority from time to time.

CHAPTER II: GENERAL CONDITIONS

General Principles

5. The underlying principles for an issuer to list its securities in IFSC are:

(a) There should be true, correct and adequate disclosure of material information in the offer document to enable the investors to take informed decision.

(b) There should be full, accurate and timely disclosure of financial results, risk and other non-financial information which is material to investors‘ decisions;

(c) All holders of listed securities shall be treated in a fair and equitable manner;

(d) The issuers shall maintain standards of quality, operations, management experience and expertise, wherever applicable; and

(e) The directors of an issuer shall ensure to act in the interests of shareholders as well as other stakeholders. General Eligibility Criteria

6. (1) The following entities shall be eligible to list its securities under these regulations on a recognised stock exchange:

(a) A company incorporated in an IFSC;

(b) A company incorporated in India; and

(c)  A company incorporated in a Foreign Jurisdiction

(2) Notwithstanding sub-regulation (1) above, the following entities shall also be eligible in respect of listing of debt securities on a recognised stock exchange, –

(a) any supranational, multilateral or statutory organisation/ institution/agency provided such organization/institution/agency is permitted to issue securities as per its constitution:

Provided that the entity is registered or headquartered in India, IFSC or a Foreign Jurisdiction;

(b) any municipality or any statutory body or board or corporation, authority, trust or agency established or notified by any Central or State Act or any special purpose vehicle notified by the State Government or Central Government including for the purpose of raising fund by the issuer to develop infrastructure or SMART city; and

(c) An entity whose securities are irrevocably guaranteed by a Sovereign (India or a Foreign Jurisdiction).

7. An issuer shall be eligible to list its securities under these regulations in IFSC only if, –

(a) the issuer is duly incorporated or established according to the relevant laws of its place of incorporation or establishment;

(b) the issuer is operating in conformity with its constitution; and

(c) the listing of securities in IFSC is in accordance with the applicable laws of the jurisdiction of incorporation.

8. An issuer shall not be eligible to list securities under these regulations if the issuer or any of its promoters, promoter group, controlling shareholders or directors or selling shareholders is –

(a) debarred from accessing the capital market; or

(b) a wilful defaulter; or

(c) a fugitive economic offender.

9. The securities proposed to be listed on a recognised stock exchange should be freely transferable and held in dematerialised form.

CHAPTER III: PUBLIC OFFER OF SPECIFIED SECURITIES (IPO AND FPO)

PART A: INITIAL PUBLIC OFFER

Eligibility criteria

10. An issuer shall be eligible to make an initial public offer only if:

(a) the issuer has an operating revenue of at least USD 20 million in the preceding financial year; or

(b) the issuer has an average pre-tax profit, based on consolidated audited accounts, of at least USD one million during the preceding three financial years; or

(c)  any other eligibility criteria that may be specified by IFSCA.

Explanation: The financial year in this regulation shall mean financial year as followed by the issuer.

11. The issuer shall have commenced business at least three years prior to the date of filing of prospectus.

12. If an issuer has issued SR equity shares or dual class shares to any shareholder, the said issuer shall be allowed to do an initial public offer of ordinary shares for listing on the recognised stock exchange(s) subject to compliance with the following:

a. The issue of SR equity shares had been authorized by a special resolution passed at a general meeting of the shareholders of the issuer;

b. The SR equity shares have been held for a period of atleast 6 months prior to the filing of the red herring prospectus;

c. The SR equity shares shall have voting rights in the ratio of a minimum of 2:1 upto a maximum of 10:1 compared to ordinary shares and such ratio shall be in whole numbers only;

d.  The SR equity shares shall have the same face value as the ordinary shares; and

e. The SR equity shares shall be equivalent to ordinary equity shares in all respects, except for having superior voting rights.

Offer for Sale

13. In case of an offer for sale, the securities must have been held by the sellers for a period of at least one year prior to the date of filing of the draft offer document:

Provided that in case the equity shares received on conversion or exchange of fully paid-up compulsorily convertible securities including depository receipts are being offered for sale, the holding period of such convertible securities, including depository receipts, as well as that of resultant equity shares together shall be considered for the purpose of calculation of one year.

Explanation: If the equity shares arising out of the conversion or exchange of the fully paid-up compulsorily convertible securities are being offered for sale, the conversion or exchange should be completed prior to filing of the offer document, provided full disclosures of the terms of conversion or exchange are made in the draft offer document.

Provided further that the requirement of holding equity shares for a period of one year shall not apply:

a) If the equity shares offered for sale were acquired pursuant to any scheme of merger or amalgamation in lieu of business and invested capital which had been in existence for a period of more than one year prior to approval of such scheme; or

b) If the equity shares offered for sale were issued under a bonus issue on securities held for a period of at least one year prior to the filing of the draft offer document with IFSCA and further subject to the following:

i. such specified securities being issued out of free reserves and share premium existing in the books of account as at the end of the financial year preceding the financial year in which the draft offer document is filed with IFSCA; and

ii. such equity shares not being issued by utilisation of revaluation reserves or unrealized profits of the issuer.

Lead manager

14. The issuer shall appoint one or more merchant bankers as lead manager(s) to the issue and shall also appoint other intermediaries in consultation with the lead manager(s).

In-principle approval from recognised stock exchange(s)

15. (1) The issuer shall file an application with the recognised stock exchange(s) seeking in-principle approval:

Provided that where the application is made to more than one recognised stock exchange, the issuer shall choose one of them as the designated stock exchange.

(2) The stock exchange(s) shall grant an in-principle approval or reject the application for the in-principle approval within thirty days from the date of receipt of complete information from the issuer.

Filing of Offer Document

16. (1) The issuer, through the lead manager(s), shall file a draft offer document along with fee as may be specified by IFSCA.

(2) The lead manager(s) shall submit a due diligence certificate along with the draft offer document.

(3) The draft offer document shall be made public, for comments, if any, by hosting it on the websites of IFSCA, stock exchange(s) and lead manager(s) for a period of not less than fourteen days.

(4) The lead manager(s) shall file with IFSCA details of the material comments received by them or the issuer from the public on the draft offer document during that period and the consequential changes, if any, that are required to be made in the draft offer document.

17. IFSCA may issue observations, if any, on the draft offer document within thirty working days from the later of the following dates:

a) The date of receipt of the draft offer document; or

b) The date of receipt of satisfactory reply from the issuer and/or the lead manager where IFSCA has sought any clarification or additional information from them; or

c) The date of receipt of clarification or information from any regulator or agency, where IFSCA has sought any clarification or information from such regulator or agency; or

d) The date of receipt of a copy of in-principle approval letter issued by the stock exchange(s).

18. The issuer shall carry out changes specified by IFSCA, if any, in the offer document.

19. The issuer shall, through the lead manager(s), file the final offer document with the Authority and the stock exchange(s).

Offer Timing

20. The offer shall be made by the issuer within a period of not more than one year from the date of issuance of observations by IFSCA:

Provided that if the offer is not made within the specified time period, a fresh draft offer document shall be filed.

Initial disclosures in the Offer Document

21. (1) The offer document shall contain all material disclosures which are true, correct and adequate to enable the investors to take an informed investment decision.

(2) The lead manager(s) shall exercise due diligence and satisfy themselves about all aspects of the issue including materiality, veracity and adequacy of disclosures in the offer document.

22. The offer document shall contain disclosures relating to the public offer, including the following:

a) Offer Document Summary

b) Risk factors

c) Introduction

d) General information

e) Capital Structure

f) Particulars of the Issue

i. Objects of the Issue

ii. Requirement of Funds

iii. Funding Plan

iv. Business/Project Appraisal, if any

v.  Schedule of Implementation

vi. Deployment of Funds

vii. Sources of financing of funds already deployed

viii. Deployment of balance funds

ix. Interim use of funds

x. Expenses of the Issue

xi. Basis of Issue Price including suitable peer group comparison

g) Underwriting

h) Tax Implications

i) About the Issuer

i. Industry Overview

ii. Business overview

iii. Organisational structure

iv. Shareholders‘ Agreements and Other material Agreements

v. Management and KMPs

vi. Major shareholders

vii. Remuneration and benefits

viii.  Dividend Policy

j) Financial Statements

k) Related Party Transactions

l)  Legal and Other Information

i. Outstanding litigations and material developments

ii.  Pending Government/Regulatory approvals

m) Information with respect to group companies

n) Other regulatory and statutory disclosures

o) Any other material disclosures

23. The audited financial information of the issuer in the offer document shall be for at least three financial years.

24. The issuer shall prepare their statement of accounts in accordance with IFRS or US GAAP or Ind AS or accounting standards as applicable in its jurisdiction of incorporation.

25. The amount for general corporate purposes, as mentioned in objects of the issue in the draft offer document and the offer document, shall not exceed twenty five percent of the amount being raised by the issuer.

Issue size

26. The issue size shall not be less than USD fifteen million or any other amount as may be specified by IFSCA.

27. (1) The issuer may make reservations on a competitive basis out of the issue size in favour of the following categories of persons and the same shall suitably be disclosed in the offer document:

a) employees;

b) directors; and

c) shareholders (other than promoters and promoter group) of listed subsidiaries or listed promoter companies.

(2) The reservations referred in sub-regulation (1) shall not exceed twenty per cent. of the issue size. Pricing

28. The issuer shall determine the pricing in consultation with the lead manager(s). The issue may be through a fixed price mechanism or through book building mechanism and the same shall be suitably disclosed in the offer document.

Offer period

29. The initial public offer shall be kept open for at least three working days and not more than ten working days:

Provided that in case the issuer has made a simultaneous offer in any other jurisdiction, the offer period may be for same period as applicable in the other jurisdiction.

Minimum subscription

30. For the offer to be successful, the following conditions shall be satisfied:

a. The minimum subscription received in the issue shall be at least seventy-five percent of the issue size; and

b. The minimum number of subscribers shall be 200 or as may be specified by the Authority. Underwriting

31. A public issue of specified securities may be underwritten by an underwriter and in such a case, adequate disclosures regarding underwriting arrangements shall be disclosed in the offer document.

Allotment

32. The allotment to investors shall be on proportionate basis or discretionary basis and shall be disclosed in the offer document:

Provided that no single investor shall be allotted more than 10% of the post issue capital.

33. The issuer and lead manager(s) shall ensure that the specified securities are allotted and the payments and refunds are completed within 5 working days from the date of closing of the issue.

Listing

34. The specified securities shall list on the stock exchange(s) within the period, as specified by the stock exchange(s):

Provided that in case the issuer has made a simultaneous offer in any other jurisdiction, the specified securities shall be listed on the same date.

Post-issue report

35. The lead manager(s) shall file a post-issue report with the recognised stock exchange(s) giving details relating to number, value and percentage of all applications received, allotments made, basis of allotment, subscription, details of credit of specified securities, details relating to payments and refunds, date of filing of listing application, etc. within ten working days from the date of closing the issue.

Price stabilisation through green shoe option

36. (1) An issuer may provide a green shoe option for stabilising the post listing price of its specified securities, subject to the following conditions:

(a) the draft offer document and offer document shall contain all material disclosures about the green shoe option;

(b) the issuer has appointed a merchant banker as a stabilising agent, who shall be responsible for the price stabilisation process;

(c) the maximum number of specified securities that may be borrowed for the purpose of allotment or allocation of specified securities in excess of the issue size shall not exceed 15% of the issue size.

(2)  The stabilisation process shall be available for a period not exceeding thirty days from the date on which trading permission is given by the stock exchanges in respect of the specified securities allotted in the public issue.

(3)  The stabilising agent shall open a special account, distinct from the issue account, with a bank for crediting the monies received from the applicants against the over-allotment and a special account with a depository participant for crediting specified securities to be bought from the market during the stabilisation period out of the monies credited in the special bank account

(4)  The specified securities bought from the market shall be returned to the pre-issue shareholders quickly, in any case not later than two working days after the end of the stabilization period.

(5)  On expiry of the stabilisation period, if the stabilising agent has not been able to buy specified securities from the market to the extent of such securities over-allotted, the issuer shall allot specified securities at issue price to the extent of the shortfall within five working days of the closure of the stabilisation period and such specified securities shall be returned to the pre-issue shareholders by the stabilising agent in lieu of the specified securities borrowed from them and the account with the depository participant shall be closed thereafter.

(6)  The issuer shall make a listing application in respect of the further specified securities allotted under sub-regulation (5), to all the stock exchanges where the specified securities allotted in the public issue are listed.

(7)  Any monies left in the special bank account after remittance of monies to the issuer and deduction of expenses incurred by the stabilising agent for the stabilisation process shall be transferred to IFSCA and the special bank account shall be closed soon thereafter.

Lock-up

37. (1) The pre-issue shareholding of all shareholders of the issuer shall be locked-up for a period of 180 days from the date of allotment in the initial public offer:

Provided that the lock-up provisions shall not apply with respect to the specified securities lent to stabilising agent for the purpose of green shoe option, during the period starting from the date of lending of such specified securities and ending on the date on which they are returned to the lender.

(2) The shareholding of the SR Equity Shares shall be locked-up after the initial public offering, until the later of:

a) their conversion to ordinary shares; and

b) 2 years from the date of allotment in the initial public offer.

(3) The specified securities held by the promoters and locked-up may be pledged as a collateral security for a loan granted by a scheduled commercial bank or a public financial institution or a systemically important non-banking finance company or a housing finance company for the purpose of financing one or more of the objects of the issue.

Other responsibilities of lead manager

38. (1) The lead manager(s) shall prepare a schedule, listing the activity-wise allocation of responsibilities relating to the issue, the name of the lead manager responsible for each set of activities or sub-activities, and disclose the same in the offer documents.

(2)  A lead manager shall be designated for ensuring compliance with these regulations and coordinating with IFSCA.

(3)  The designated lead manager shall be responsible for ensuring that all intermediaries fulfil their obligations and functions as specified in their agreements with the issuer.

(4)  The responsibilities of the lead manager(s) shall continue until completion of the issue process and for any issue related matter thereafter.

(5)  The lead manager(s) shall continue to be responsible for post-issue activities till the applicants have received the securities certificates, credit to their demat account or refund of application monies and the listing agreement is entered into by the issuer with the stock exchange and listing or trading permission is obtained.

Prohibition on payment of incentives

39. Any person connected with the issue shall not offer any incentive, whether direct or indirect, in any manner, whether in cash or kind or services or otherwise to any person for making an application in the public offer, except for fees or commission for services rendered in relation to the issue.

PART B: FOLLOW-ON PUBLIC OFFER

Applicability

40. An issuer listed on a recognised stock exchange may make a follow-on public offer of specified securities in the manner provided in these regulations.

Offer for sale

41. In case of an offer for sale, the securities must have been held by the sellers for a period of at least one year prior to the date of filing of the draft offer document:

Provided that in case the equity shares received on conversion or exchange of fully paid-up compulsorily convertible securities including depository receipts are being offered for sale, the holding period of such convertible securities, including depository receipts, as well as that of resultant equity shares together shall be considered for the purpose of calculation of one year.

Explanation: If the equity shares arising out of the conversion or exchange of the fully paid-up compulsorily convertible securities are being offered for sale, the conversion or exchange should be completed prior to filing of the offer document, provided full disclosures of the terms of conversion or exchange are made in the draft offer document.

Provided further that the requirement of holding equity shares for a period of one year shall not apply:

a) If the equity shares offered for sale were acquired pursuant to any scheme of merger or amalgamation in lieu of business and invested capital which had been in existence for a period of more than one year prior to approval of such scheme; or

b) If the equity shares offered for sale were issued under a bonus issue on securities held for a period of at least one year prior to the filing of the draft offer document with IFSCA and further subject to the following:

(i) such specified securities being issued out of free reserves and share premium existing in the books of account as at the end of the financial year preceding the financial year in which the draft offer document is filed with IFSCA; and

(ii) such equity shares not being issued by utilisation of revaluation reserves or unrealized profits of the issuer.

Lead manager

42. The issuer shall appoint one or more merchant bankers as lead manager(s) to the issue and shall also appoint other intermediaries in consultation with the lead manager(s).

In-principle approval from recognised stock exchange(s)

43. (1) The issuer shall file an application with the recognised stock exchange(s) seeking in-principle approval:

Provided that where the application is made to more than one recognised stock exchange, the issuer shall choose one of them as the designated stock exchange.

(2) The stock exchange(s) shall grant an in-principle approval or reject the application for the in-principle approval within thirty days from the date of receipt of complete information from the issuer.

Fast track follow-on public offer

44. (1) An issuer may make follow-on public offer through the fast track route, if the issuer satisfies the following conditions:

(a) equity shares of the issuer have been listed on a recognised stock exchange for a period of at least 18 months;

(b) issuer has complied with all the regulatory requirements specified by IFSCA and the recognised stock exchange(s) in the preceding three years;

(c) no show-cause notice has been issued by IFSCA and pending against the issuer or its promoters or controlling shareholders or whole-time directors;

(d)    there is no adverse opinion, disclaimer of opinion, qualified opinion by the auditors on the financial statements of the issuer, or any of the issuer’s subsidiaries or associated companies (having a material impact on the issuer’s consolidated accounts), in the preceding three years;

(e) there has not been any disclosure relating to irregularities in the issuer, having a material impact on the issuer, by any director, key managerial personnel or compliance officer:

Explanation: If the issuer is listed for a period of less than three years, the period would be considered from the date of listing for the purpose of clauses (b) and (d) above.

(2) The issuer shall file the offer document with the IFSCA along with fee as may be specified by IFSCA.

(3) The lead manager(s) shall submit a due diligence certificate along with the offer document.

(4) The issuer shall simultaneously file the offer document with the recognised stock exchange(s). Follow-on public offer without fast track

45. The issuer not meeting the conditions for fast track follow-on public offer, may make follow-on public offer by filing of offer document in the same manner as provided for Initial Public Offers under Part A of this Chapter.

Initial Disclosures

46. (1) The offer document shall contain all material disclosures which are true, correct and adequate to enable the investors to take an informed investment decision.

(2) The lead manager(s) shall exercise due diligence and satisfy themselves about all aspects of the issue including the veracity and adequacy of disclosures in the offer document.

47. The offer document shall contain disclosures relating to the public offer, including the following:

a) Offer Document Summary

b) Risk factors

c) Introduction

d) General information

e) Capital Structure

f) Particulars of the Issue

i.  Objects of the Issue

ii. Requirement of Funds

iii. Funding Plan

iv.  Business/Project Appraisal, if any

v. Schedule of Implementation

vi. Deployment of Funds

vii. Sources of financing of funds already deployed

viii. Deployment of balance funds

ix. Interim use of funds

x. Expenses of the Issue

xi. Basis of Issue Price including suitable peer group comparison

g) Underwriting

h) Tax implications

i) Financial Statements

j) Legal and Other Information

i. Outstanding litigations and material developments

ii. Pending Government/Regulatory approvals

k) Information with respect to group companies

l) Other regulatory and statutory disclosures

m) Any other material disclosures

Explanation: The issuer may submit the disclosures in offer document by providing references to a recent prospectus or other disclosures made on a recognised exchange.

48. The amount for general corporate purposes, as mentioned in objects of the issue in the draft offer document and the offer document, shall not exceed twenty-five percent of the amount being raised by the issuer.

Issue Process

49. The provisions relating to offer timing, issue size, pricing, offer period, minimum subscription, underwriting, allotment, listing, post-issue report, other responsibilities of lead manager and prohibition on payment of incentives provided for Initial Public Offers under Part A of this Chapter shall mutatis mutandis apply to follow-on public offer by a listed issuer.

CHAPTER IV: LISTING OF START-UP AND SME COMPANIES

Eligibility Criteria

50. A start-up company shall be eligible to list its specified securities on a recognised stock exchange, with or without making a public offer, if it meets the following criteria:

(a) The offer document of the company should be filed within a period of ten years from the date of incorporation/ registration;

(b) The annual turnover of the company for any of the financial years since incorporation/ registration should not have exceeded USD twenty million; and

(c) The company is working towards innovation, development or improvement of products or processes or services, or it is a scalable business model with a high potential of employment generation or wealth creation.

51. A small and medium enterprise company shall be eligible to list its specified securities on a recognised stock exchange, with or without making a public offer, if the annual turnover of the company for any of the financial years since incorporation/ registration should not have exceeded USD fifty million.

52. The provisions of this Chapter shall apply to eligible start-up and SME companies fulfilling the above criteria.

53. The provisions relating to SR equity shares provided in Chapter III shall mutatis mutandis apply for listing of start-up companies and SME companies under this chapter.

In-principle approval from recognised stock exchange(s)

54. (1) The company shall file an application with the recognised stock exchange(s) seeking in-principle approval:

Provided that where the application is made to more than one recognised stock exchange, the issuer shall choose one of them as the designated stock exchange.

(2) The stock exchange(s) shall grant an in-principle approval or reject the application for the in-principle approval within thirty days from the date of receipt of complete information from the issuer.

PART A: Listing without public offer

55. (1) The company shall file the information document along with fee as may be specified by IFSCA.

(2) The lead manager(s) shall submit a due diligence certificate along with the information document.

(3) The issuer shall simultaneously file the information document with the recognised stock exchange(s). Initial Disclosures

56. The information document shall contain all material disclosures which are true, correct and adequate to enable the investors to take an informed investment decision.

57. The information document shall contain disclosures relating to the issuer, including the following:

a) Summary

b) Risk factors

c) Introduction

d) General information

e) About the Company

i. Industry Overview

ii. Business overview

iii. Organisational structure

iv. Shareholders‘ Agreements and Other Agreements

v. Management

vi. Major shareholders

vii. Remuneration and benefits

viii. Dividend Policy

f) Capital Structure

g) Financial Statements

h) Related Party Transactions

i) Legal and Other Information

i. Outstanding litigations and material developments

ii. Pending Government/Regulatory approvals

j) Information with respect to group companies

k) Other regulatory and statutory disclosures

l) Any other material disclosures

58. The information document shall be approved by the board of directors of the company and shall be signed by all the directors, the Chief Executive Officer/ Managing Director and the Chief Financial Officer of the company.

59. The company shall list its specified securities on the recognised stock exchange(s) within thirty days of the approval from the stock exchange(s).

PART B: Listing with public offer

60. The provisions relating to offer for sale, filing of offer document, offer timing, initial disclosures in the offer document, pricing, offer period, underwriting, allotment, listing, post-issue report, other responsibilities of lead manager and prohibition on payment of incentives provided for Initial Public Offers under Part A of Chapter III shall mutatis mutandis apply to initial public offer by a start-up or SME company under this Chapter.

Issue size

61. The issue shall be of size USD two million or more but less than USD fifteen million, or any other amount as may be specified by IFSCA.

62. (1) The issuer may make reservations on a competitive basis out of the issue size in favour of the following categories of persons and the same shall be suitably disclosed in the offer document:

a) employees;

b) directors; and

c) shareholders (other than promoters and promoter group) of listed subsidiaries or listed promoter companies.

(2) The reservations referred in sub-regulation (1) shall not exceed twenty per cent. of the issue size. Minimum subscription

63. For the offer to be successful, the following conditions shall be satisfied:

a. The minimum subscription received in the issue shall be at least seventy-five percent of the offer size; and

b. The minimum number of subscribers shall be 50 or as may be satisfied by the Authority.

CHAPTER V: SECONDARY LISTING OF SPECIFIED SECURITIES Listing without public offer

64. Any company which is having its specified securities listed in India (outside IFSC) or in a Foreign Jurisdiction may list its specified securities on a recognised stock exchange(s), without public offer, subject to the following conditions:

a) The company shall file listing application, in the manner specified by the stock exchange(s); and

b) The company shall comply with the listing requirements of the stock exchange(s) and other conditions as may be specified by IFSCA.

Listing with public offer

65. Any company which is having its specified securities listed in India (outside IFSC) or in a Foreign Jurisdiction may list its specified securities on a recognised stock exchange(s) by undertaking public offer.

66. The provisions relating to appointment of lead manager, in-principle approval from recognised stock exchanges, filing of offer document, offer timing, initial disclosures in offer document, pricing, offer period, issue size, minimum subscription, underwriting, allotment, listing, post-issue report, other responsibilities of lead manager and prohibition on payment of incentives provided for Initial Public Offers under Part A of Chapter III shall mutatis mutandis apply to secondary listing with public offer by such issuer:

Explanation: For the purpose initial disclosures in offer document, the issuer may submit the disclosures in offer document by providing references to a recent prospectus or other disclosures made on the home exchange or regulatory body.

CHAPTER VI: LISTING OF SPECIAL PURPOSE ACQUISITION COMPANIES Eligibility

67. A Special Purpose Acquisition Company issuer shall be eligible to raise capital through initial public offer of specified securities on the recognised stock exchange(s), only if:

a) the target business combination has not been identified prior to the IPO; and

b) The SPAC has the provisions for redemption and liquidation in line with these Regulations.

68. (1) A sponsor of the SPAC issuer shall have a good track record in SPAC transactions or business combinations or fund management or merchant banking activities, and the same shall be disclosed in the offer document.

(2) For the purpose of these regulations, sponsor shall mean a person sponsoring the formation of the SPAC and shall include persons holding any specified securities of the SPAC prior to the IPO.

69. An issuer shall not be eligible to list securities under these regulations if the issuer or any of its sponsors is –

(a) debarred from accessing the capital market; or

(b) a wilful defaulter; or

(c) a fugitive economic offender.

IPO Process

70. The provisions relating to appointment of lead manager, in-principle approval from recognised stock exchange(s) and filing of offer document provided for Initial Public Offers under Part A of Chapter III shall mutatis mutandis apply to initial public offer by a SPAC issuer.

71. IFSCA may consider the proposed listing of a SPAC issuer on a recognised stock exchange on a case-by-case basis.

Offer Timing

72. The offer shall be made by the issuer within a period of not more than one year from the date of issuance of observations by IFSCA:

Provided that if the offer is not made within the specified time period, a fresh draft offer document shall be filed. Initial disclosures in the Offer Document

73. (1) The offer document shall contain all material disclosures which are true, correct and adequate to enable the investors to take an informed investment decision.

(2) The lead manager(s) shall exercise due diligence and satisfy themselves about all aspects of the issue including the veracity and adequacy of disclosures in the offer document.

74. The offer document shall contain disclosures relating to the public offer, including the following:

a) Offer Document Summary

b) Risk factors

c) Introduction

d) General information

e) Capital Structure

f) Redemption Rights

g) Liquidation

h) Particulars of the Issue

i.  Objects of the Issue

ii. Use of proceeds

iii. Interim use of funds

iv.  Expenses of the Issue

i) Underwriting

j) Tax implications

k)    About the Issuer

i. Organisational structure

ii. Details of sponsors and their track record

iii. The SPAC‘s target business sector or geographic area for its business combination, if applicable;

Explanation: However, the target business combination shall not be identified prior to the IPO and a declaration in this regard shall be disclosed.

iv. Time period for completion of the business combination

v.  The valuation method(s) intended to be used in valuing the business combination, if known

vi. Management

vii. Remuneration and benefits

l) Financial Statements

m) Related Party Transactions

n) Legal and Other Information

i. Outstanding litigations and material developments

ii. Government approvals

o) Information with respect to group companies

p) Other regulatory and statutory disclosures

q) Any other material disclosures.

Issue size

75.  (1) The issue shall be of size not less than USD fifty million or any other amount as may be specified by IFSCA from time to time.

(2) The sponsors shall hold at least 15% and not more than 20% of the post issue paid up capital:

Provided that the sponsors shall also have aggregate subscription (all securities) in terms of amount in the SPAC company prior to or simultaneous to the IPO, amounting to at least 2.5% of the issue size or USD 10 million, whichever is lower, or any other amount as may be specified by the Authority.

Pricing

76.   (1) The issue shall be through a fixed price mechanism and the issuer shall determine the price in consultation with the lead manager(s).

(2) The price of the equity shares in the initial public offer shall not be less than USD 5 per share. Offer period

77. The initial public offer shall be kept open for at least three working days and not more than ten working days. Underwriting

78. (1) A public issue of specified securities may be underwritten by an underwriter and in such a case adequate disclosure regarding underwriting arrangements shall be disclosed in the offer document.

(2) At least 50% of the underwriting commission shall be deferred until successful completion of the business combination, and shall be deposited in the escrow account.

(3) In case of liquidation, the underwriter shall waive their rights on the deferred commission deposited in the escrow account.

Application and Allotment

79. (1) The minimum application size in an initial public offer of SPAC shall be USD 100,000.

(2) For the offer to be successful, the following conditions shall be satisfied:

a) The minimum subscription received in the issue shall be at least seventy-five percent of the issue size; and

b) The minimum number of subscribers shall be 50 or as may be specified by the Authority.

(3) No single application shall be allotted more than 10% of the post issue capital and the allotment to investors shall be on proportionate basis or discretionary basis, as disclosed in the offer document.

80. The issuer and lead manager(s) shall ensure that the specified securities are allotted and the payments and refunds are completed within 5 working days from the date of closing of the issue.

Other provisions

81. The provisions relating to listing, post-issue report, other responsibilities of lead manager and prohibition on payment of incentives provided for Initial Public Offers under Part A of Chapter III shall mutatis mutandis apply to initial public offer by a SPAC issuer.

SPAC specific obligations

82. (1) The SPAC issuer shall ensure that the entire proceeds of the IPO are kept in an interest-bearing escrow account controlled by an independent custodian until consummation of the SPAC‘s business combination.

(2)    The escrow funds shall be invested only in instruments disclosed in the offer document and shall include only short-term investment grade liquid instruments.

(3) The interest and other income derived from the amount placed in the escrow account may be withdrawn by the SPAC issuer for the following purposes:

(a) Payment of taxes; and

(b) General working capital expenses, subject to prior approval by way of special resolution of the shareholders other than sponsors.

83. The SPAC shall file a detailed prospectus with the recognised stock exchange(s) containing all relevant disclosures regarding the proposed business combination, while seeking shareholders‘ approval, including the following disclosures:

(a) Information about the target company(ies) shall include overview of industry and business, organisational structure, board of directors, management and key managerial personnel (KMPs), major shareholders, material shareholders‘ agreements, audited financial statements for at least previous 3 financial years, outstanding material litigations against the company and its directors and KMPs, potential conflicts of interest and other material information;

(b) Information about the business combination transaction including valuation of the entities and the methodologies used for valuation;

(c) Information about the process involved in the business combination and the various regulatory and statutory approvals required for completion of the transaction;

(d) Information about the resulting issuer company that would be formed after completion of the business combination; and

(e) Any other information as may be specified by the recognised stock exchange(s) or IFSCA from time to time.

84. (1) The SPAC shall seek prior approval by way of majority of shareholders other than sponsors, for the proposed business combination.

(2) If a shareholder (other than sponsors) has voted against the proposed business combination, he shall have the redemption right for converting his securities into a pro rata portion of the aggregate amount held in the escrow account (net of taxes payable).

Explanation: A shareholder who has not voted may not be afforded redemption right by the SPAC issuer.

(3) In the event of change in control of the SPAC, the SPAC issuer shall provide the redemption option to the shareholders (other than sponsors) for converting their securities into a pro rata portion of the aggregate amount held in the escrow account (net of taxes payable).

85. The SPAC issuer shall complete the business combination within the timeline disclosed in the offer document, not exceeding 36 months from the date of listing on the recognised stock exchange(s).

86. (1) If the business combination is not completed within the permitted time frame, the escrow account shall be liquidated in terms of these regulations and disclosures in the offer document.

(2) In the event of liquidation and delisting, the sponsors shall not participate in the liquidation distribution.

87. A sponsor shall not transfer or sell any of his specified securities prior to the completion of a business combination.

88. The SPAC issuer shall ensure that the businesses acquisition shall have an aggregate fair market value equal to at least 80% of the aggregate amount deposited in the escrow account, excluding deferred underwriting commissions held in escrow and any taxes payable on the income earned on the escrowed funds.

89. The SPAC and the sponsors shall ensure that there is no related party transaction or connection of sponsor or any of their associates with the business combination.

90. Where warrants have been issued in the IPO, the SPAC shall comply with the following:

a)  Each unit may consist of one share and no more than one share purchase warrants;

b)  The exercise price of the warrants shall not be lower than the price of the equity shares offered in the IPO;

c) The warrants may be detached with the equity shares and traded separately on the recognised stock exchanges provided that details have been appropriately disclosed in the offer document;

d) The warrants shall not be exercisable prior to the completion of the business combination;

e)  In case of liquidation of SPAC, the warrants shall expire; and

f) The warrants shall not have any entitlement to the funds lying in the escrow account upon liquidation or redemption.

91. IFSCA may, from time to time, prescribe additional norms regarding listing of SPACs on the recognised stock exchange(s).

Continuous disclosure requirements

92. The continuous disclosure requirements applicable for Listed Companies provided under Chapter XI of these regulations shall mutatis mutandis apply to a SPAC issuer.

Post business combination

93. (1) The resulting issuer shall immediately disclose details regarding the completed transaction to the recognised stock exchange(s).

Explanation: For the purpose of this chapter, the resulting issuer means the issuer resulting from the completion of the business combination by the SPAC.

(2) The resulting issuer shall be required to meet the listing eligibility criteria set out in these regulations within 180 days, in order to continue listing on the recognised stock exchange(s).

(3) The resulting issuer shall comply with the listing obligations and continuous disclosure requirements specified under Chapter XI of these regulations.

(4) The shareholding of the sponsors of the SPAC in the resulting issuer shall be locked up for a period of one year from the date of closing of the business combination.

(5) The shareholding of the promoters, promoter groups, controlling shareholders, directors and key managerial personnel of the resulting issuer shall be locked up for a period of one year from the date of closing of the business combination.

CHAPTER VII: RIGHTS ISSUES AND PREFERENTIAL ISSUES

94. A company listed on a recognised stock exchange may issue rights issues or preferential issues of specified securities, subject to compliance with the requirements that may be specified by the recognised stock exchange(s) and the Authority from time to time.

CHAPTER VIII: LISTING OF DEPOSITORY RECEIPTS

PART A: Eligibility Requirements

Eligibility

95. A company incorporated in India (outside IFSC) or a Foreign Jurisdiction shall be eligible to make an issue of depository receipts only if –

a) the issuer is authorised to issue depository receipts; and

b) the issuance of depository receipts by the issuer is in accordance with the applicable laws of its home jurisdiction.

96. The depository receipts shall be eligible to list only if the underlying securities which the depository receipts represent are:

(a) freely transferable, in dematerialised form and rank pari passu with the existing securities of the same class;

(b) fully paid and free from all liens; and

(c) listed or will be listed in the home jurisdiction of the issuer before listing of depository receipts on stock exchange(s).

97. All the depository receipts shall be freely negotiable.

98. The issuer shall ensure that it has entered into an agreement with a depository for dematerialisation of the DRs proposed to be issued.

PART B: Initial Public Offer of Depository Receipts

Offer size

99. The issue of depository receipts shall be of size not less than USD 700,000 (or equivalent in foreign currency), or any other amount as may be specified by the Authority from time to time.

Filing of Offer Document

100. The filing of offer document shall be in the manner as provided for filing of offer document for initial public offer under Chapter III of these Regulations.

Initial disclosures in the Offer Document

101. (1) The offer document shall contain all material disclosures which are true, correct and adequate to enable the investors to take an informed investment decision.

(2) The lead manager(s) shall exercise due diligence and satisfy themselves about all aspects of the issue including the veracity and adequacy of disclosures in the offer document.

102. The offer document shall contain disclosures relating to the public offer, including the following:

(a) Issuer Disclosure

i. General information

ii. Statutory auditor

iii. Risk factors

iv. Information about the issuer

v.  Business overview

vi.  Organisational structure

vii. Management

viii. Remuneration and benefits

ix.  Capital structure

x. Major shareholders

xi. Related party transactions

xii. Financial information

xiii. Material contracts

xiv. Material outstanding litigations and defaults

xv.    Approvals of the government/regulatory authorities, if applicable

xvi.  Foreign investment and exchange controls of the jurisdiction of incorporation/ where the underlying securities are listed.

(b) Securities Disclosures

i.  Information about the underlying securities

ii. Information about the DRs

iii.  Rights of the DR holders including dividend rights, voting rights etc.

iv.  Information relating to the depository

(c) Issue related Disclosures

i. Objects of the issue

ii.  Interim use of proceeds

iii. Pricing

iv. Plan of distribution and allotment

v. Placing and Underwriting

vi. Taxation

Explanation: Since the underlying securities of the issuer are listed on its home exchange, the issuer may incorporate the information required in this clause by providing references to a recent prospectus or other disclosures made on the home exchange or regulatory body.

103.  The audited financial information of the issuer in the offer document shall be for at least three financial years:

Provided that the financial information may be provided for a lesser period if the issuer has not completed 3 years since incorporation:

Provided further that the latest financial statements provided in the offer document shall not be more than 12 months old.

104. The issuer shall prepare their statement of accounts in accordance with IFRS or US GAAP or Ind AS or accounting standards as applicable in its home jurisdiction.

Pricing

105.  The issuer may determine the price of the DRs in consultation with the lead manager(s) or through the book building process.

Offer period

106. The initial public offer of DRs shall be kept open for at least three working days and not more than ten working days.

Minimum subscription

107. The listing of DRs shall be permitted only if the subscription in the offer is not less than USD 700,000 (or equivalent in foreign currency) or any other amount as may be specified by IF SCA from time to time.

Allotment

108. The issuer and lead manager(s) shall ensure that the DRs are allotted and the payments and refunds are completed within 5 working days from the date of closing of the issue.

Listing

109. The DRs shall list on the stock exchange(s) within the period, as specified by the stock exchange(s). PART C: Listing and Trading (without public offer)

110. Any company which is having its depository receipts listed in India (outside IFSC) or in a Foreign Jurisdiction may list its depository receipts on a recognised stock exchange, subject to the following conditions:

a) The company shall file listing application, in the manner specified by the stock exchange(s); and

b) The company shall comply with the listing requirements of the stock exchange(s).

CHAPTER IX: LISTING OF DEBT SECURITIES

Eligible Debt Securities

111. The following categories of debt securities are eligible for listing on a recognised stock exchange:

a) Debt securities issued by an issuer incorporated in IFSC;

b) Debt securities issued by an issuer incorporated in India or a Foreign Jurisdiction in any currency other than INR;

c) Debt securities issued by a supranational, multilateral or statutory organisation/ institution /agency;

d) Debt securities issued by any municipality or any statutory body or board or corporation, authority, trust or agency established or notified by any Central or State Act or any special purpose vehicle notified by the State Government or Central Government including for the purpose of raising fund by the issuer to develop infrastructure or SMART city;

e) Debt securities irrevocably guaranteed by a Sovereign (India or a Foreign Jurisdiction);

f) Masala bonds;

g) Any other debt securities as may be permitted by IFSCA from time to time.

Explanation: The debt securities include standalone issuances or series of issuances such as Medium Term Note programmes.

Mandatory listing for issuers based in IFSC

112. An issuer incorporated in IFSC and desirous of issuing debt securities shall mandatorily apply for listing of its debt securities on a recognised stock exchange.

Filing of Documents

113. (1) The issuer desirous of listing its debt securities on a recognised stock exchange shall file the listing application along with a copy of the prospectus, shelf prospectus or information memorandum, as applicable, with the recognised stock exchange(s), in line with the requirements specified by the recognised stock exchange(s):

(2) The issuer shall file the listing application with the recognised stock exchange(s) along with regulatory fee as may be specified by the Authority.

Explanation: The regulatory fee collected by the recognised stock exchange(s) shall be remitted to IFSCA on a quarterly basis.

Initial Disclosures

114. (1) The prospectus, shelf prospectus, or information memorandum, as applicable, shall contain all material disclosures which are true, correct and adequate to enable the investors to take an informed investment decision.

(2) The issuer shall ensure that the following disclosures are made in the prospectus or information memorandum:

a. Issuer Disclosures

i. General information

ii. Risk Factors

iii. Information about the issuer

iv.  Business overview

v.  Organisational structure

vi.  Management

vii.  Major / controlling shareholders

viii. Audited Financial Statements

ix. Statutory auditor

x. Material outstanding litigations and defaults

b. Securities Disclosures

i. Details of debt securities

ii.  Risk factors

iii. List of exchanges where the debt securities are listed or proposed to be listed

iv. Maximum amount of issuance (in case of medium term notes programme)

(3) In addition to the disclosure requirements specified in sub-regulation (2), the issuer shall disclose the requirements specified by the recognised stock exchange(s).

115. In case of debt securities issued under a programme (including Medium Term Notes programme), the recognised stock exchange may admit to trading the securities which are issued under the programme within twelve months after the approval of the application.

116. The issuer shall ensure that the pricing supplements, wherever applicable, are submitted to the recognised stock exchange(s) before admission to trading.

117. If the security is backed by a guarantee or letter of comfort or any other document /letter with similar intent, the issuer shall ensure that the relevant details are adequately disclosed in the prospectus or information memorandum.

118. The exchange may provide exemption from certain disclosures in the prospectus, shelf prospectus or information memorandum, subsequent to evaluation of the request received from the issuer.

Minimum subscription in case of private placement

119. The minimum subscription amount in case of private placement per investor shall not be less than USD hundred thousand or equivalent or such amount as may be specified by the Authority from time to time, in respect of debt securities listed on a recognised stock exchange.

Credit Rating

120. (1) The issuer may obtain credit rating for its debt securities from a credit rating agency registered with the Authority or registered in India or any Foreign Jurisdiction.

(2) In case credit rating has been obtained, the issuer shall disclose details of the credit ratings in the prospectus, shelf prospectus or information memorandum, as the case may be.

Public Issue

121. In respect of a public issue of debt securities on a recognised stock exchange, the issuer shall comply with requirements such as appointment of trustee, creation of debenture redemption reserve etc. that may be specified by the Authority or the recognised stock exchange(s), from time to time.

Exempt Issuers

122. The recognised stock exchange(s) may relax some of the requirements from this chapter for the following exempt issuers:

(a) Supranational, multilateral or statutory institutions /organizations /agencies; and

(b) Entities whose securities are irrevocably guaranteed by a Sovereign; and

(c) Any other entity as may be specified by the Authority from time to time.

CHAPTER X: ENVIRONMENT, SOCIAL AND GOVERNANCE (ESG) DEBT SECURITIES Applicability

123. (1) This chapter shall apply to “green”, “social”, “sustainablility” or “sustainability-linked” debt securities listed on a recognised stock exchange in IFSC.

(2) The requirements under this chapter shall be in addition to the requirements detailed in Chapter IX for listing of debt securities on a recognised stock exchange in IFSC.

124. (1) The debt securities shall be labelled as “green”, “social” or “sustainability” if the funds raised through the issuance of such debt securities are to be utilised for financing or refinancing projects and/or assets aligned with any of the following recognised frameworks:

a) International Capital Market Association Principles / Guidelines;

b) Climate Bonds Standard;

c) ASEAN Standards;

d) European Union Standards / Taxonomy;

e) Any framework or methodology specified by a competent authority in India; or

f) Other international standards

Explanation: Other international standards may be considered on a case-by- case basis by the recognised stock exchange(s) or IFSCA.

(2) The debt securities shall be labelled as ―sustainability-linked‖ if aligned with any of the recognised frameworks specified under sub-regulation (1) or any other such qualifying criteria as may be specified by the Authority from time to time.

(3) The issuer shall appoint an independent external reviewer to ascertain that the ESG debt securities are in alignment with any of the recognised framework(s) mentioned at sub-regulation (1), in compliance with the following conditions:

a) Reviewer shall be independent of the issuer, its directors, senior management, key managerial personnel and advisers;

b) Reviewer shall be remunerated in a way that prevents any conflicts of interests; and

c) Reviewer shall have sufficient expertise in assessing ESG debt securities.

(4) The independent external review mentioned at sub-regulation (3) may take one or more of the following forms recommended by International Capital Market Association:

a) Second Party Opinion

b) Verification

c) Certification

d) Scoring / Rating

(5) The issuer shall ensure that the details regarding the independent external review are disclosed and easily accessible to the investors.

Additional disclosures in Offer document / Information Memorandum

125. (1) The issuer shall make the following additional disclosures in the offer document or information memorandum, as the case may be, in respect of ESG debt securities (other than sustainability-linked debt securities):

a) A statement on ESG objectives of the issue of debt securities;

b) Details of process followed by the issuer for evaluating and selecting the project(s) and/or asset(s);

c) Proposed utilisation of the proceeds of the issue shall include details of the project(s) and/or asset(s); and

d) Details of the systems and procedures to be employed for tracking the deployment of the proceeds of the issue.

(2) The issuer shall make the following additional disclosures in the offer document or information memorandum, as the case may be, in respect of sustainability-linked debt securities:

a) The issuer shall disclose the rationale for issuance of sustainability-linked debt securities and consistency with issuers‘ overall sustainability and business strategy.

b) The issuer shall adhere to pre-issuance and post-issuance obligations in accordance with the international standards that the securities are aligned with:

Explanation: Where the debt securities are aligned with ICMA Sustainability-Linked Bond Principles (2020), the guidelines related to 5 core components – Selection of Key Performance Indicators, Calibration of Sustainability Performance Targets, Bond characteristics, Reporting and Verification shall be followed for all the disclosures and continuous obligations.

Additional Continuous Disclosure Requirements

126. (1) The issuer shall provide the following additional disclosures to the recognised stock exchange(s), at least on an annual basis, until full allocation of the proceeds, in respect of ESG debt securities (other than sustainability-linked debt securities):

a) Utilisation of proceeds of the issue;

b)  Allocation: List of project(s) and/or asset(s) to which proceeds of the debt securities have been allocated/invested including a brief description of such project(s) and/or asset(s) and the amounts disbursed:

Explanation: However, where confidentiality agreements limit the amount of detail that can be made available about specific project(s) and/or asset(s), information shall be presented in generic terms or on an aggregated portfolio basis; and

c) Impact: Qualitative performance indicators and, where feasible, quantitative performance measures of the expected/achieved ESG impact of the project(s) and/or asset(s).

Explanations:

(i) If the quantitative benefits/impact cannot be ascertained, then the said fact may be appropriately disclosed along with the reasons for non-ascertainment of the benefits/impact on the ESG.

(ii)    The methods and the key underlying assumptions used in preparation of the performance indicators and metrics shall be disclosed.

(2) The issuer of sustainability-linked debt securities shall provide the following additional disclosures to the recognised stock exchange(s), at least on an annual basis, and in any case for any date/period relevant for assessing the Sustainability Performance Targets (SPT) performance leading to a potential adjustment of the debt securities‘ financial and/or structural characteristics:

a) up-to-date information on the performance of the selected Key Performance Indicator(s), including baselines where relevant;

b) any information enabling investors to monitor the level of ambition of the SPTs; and

c) a verification report by an independent external reviewer outlining the performance against the SPTs and the related impact, and timing of such impact, on the debt securities‘ financial and/or structural characteristics.

CHAPTER XI: LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS

PART A: GENERAL OBLIGATIONS

Applicability

127. The provisions of Part A of this Chapter shall apply to all listed securities on the recognised stock exchange(s) under these regulations.

Principles governing disclosures and obligations

128. The listed entity which has listed securities shall make disclosures and abide by its obligations under these regulations, in accordance with the following principles:

a) Information shall be prepared and disclosed in accordance with applicable standards of accounting and financial disclosure.

b) The listed entity shall implement the prescribed accounting standards in letter and spirit in the preparation of financial statements taking into consideration the interest of all stakeholders and shall also ensure that the annual audit is conducted by an independent, competent and qualified auditor.

c) The listed entity shall refrain from misrepresentation and ensure that the information provided to recognised stock exchange(s) and investors is not misleading.

d) The listed entity shall provide adequate and timely information to recognised stock exchange(s) and investors.

e) The listed entity shall ensure that disseminations made under provisions of these regulations and circulars made thereunder, are adequate, accurate, explicit, timely and presented in a simple language.

f) Channels for disseminating information shall provide for equal, timely and cost efficient access to relevant information by investors.

g) The listed entity shall abide by all the provisions of the applicable laws including the securities laws and also such other guidelines as may be issued from time to time by IFSCA and the recognised stock exchange(s) in this regard and as may be applicable.

h)  The listed entity shall make the specified disclosures and follow its obligations in letter and spirit taking into consideration the interest of all stakeholders.

i) Filings, reports, statements, documents and information which are event based or are filed periodically shall contain relevant information and shall be filed within the specified timelines.

j) Periodic filings, reports, statements, documents and information reports shall contain information that shall enable investors to track the performance of a listed entity over regular intervals of time and shall provide sufficient information to enable investors to assess the current status of a listed entity.

General obligation of compliance

129. The listed entity shall ensure that key managerial personnel, directors, promoters, controlling shareholders or any other person dealing with the listed entity comply with responsibilities or obligations, if any, assigned to them under these regulations.

Compliance Officer and his Obligations

130. (1) A listed entity shall appoint a qualified company secretary as the compliance officer. (2) The compliance officer of the listed entity shall be responsible for-

(a) ensuring conformity with the regulatory provisions applicable to the listed entity in letter and spirit;

(b) co-ordination with and reporting to IFSCA, recognised stock exchange(s) and depositories with respect to compliance with rules, regulations and other directives of these authorities in the manner as specified from time to time; and

(c)     ensuring that the correct procedures have been followed that would result in the correctness, authenticity and comprehensiveness of the information, statements and reports filed by the listed entity under these regulations.

PART B: COMPANIES WITH SPECIFIED SECURITIES LISTED ON RECOGNISED STOCK EXCHANGES AS A PRIMARY LISTING

Event based disclosures

131. The Listed Company shall immediately make disclosure of any event or information concerning it or any of its subsidiaries or associated companies which, in the opinion of the board of directors of the Listed Company, is material or price sensitive.

Explanation I: The listed entity shall consider the following criteria for determination of materiality of events/ information:

a) the omission of an event or information, which is likely to result in discontinuity or alteration of event or information already available publicly; or

b) the omission of an event or information is likely to result in significant market reaction if the said omission came to light at a later date; or

c) In case where the criteria specified in sub-clauses (a) and (b) are not applicable, an event/information may be treated as being material if in the opinion of the board of directors of listed entity, the event / information is considered material.

Explanation II: For the purpose of these regulations, immediately shall mean promptly but not later than 24 hours.

132. The Listed Company shall frame a policy for determination of materiality, based on criteria specified in these regulations, duly approved by its board of directors, which shall be disclosed on its website.

133. The Listed Company shall immediately disclose to the stock exchanges any amendment to memorandum or articles of association of listed entity.

134. The Listed Company shall give prior intimation about the meeting of the board of directors and immediately disclose outcome of the meeting of the board of directors, to the stock exchange(s) in respect of any of the following proposals:

a. dividends;

b. buyback of securities;

c. decision with respect to fund raising or change in capital;

d.  financial results; and

e.  decision on voluntary delisting by the listed entity from stock exchange(s).

135. The Listed Company shall immediately disclose to the stock exchanges the proceedings of Annual and extraordinary general meetings.

136. (1) The Listed Company shall immediately disclose to the stock exchanges change in directors, key managerial personnel, Auditor and Compliance Officer.

(2) In case of a resignation of the auditor of the Listed Company, detailed reasons for resignation of auditor, as given by the said auditor, shall be disclosed by the Listed Company to the stock exchanges as soon as possible but not later than twenty-four hours of receipt of such reasons from the auditor.

(3) In the case of a resignation of any director, key managerial personnel or compliance officer, such person shall inform to the stock exchange(s), in writing if he is aware of any irregularities in the Listed Company which would have a material impact on the company, including financial reporting, as soon as possible but not later than twenty-four hours.

137. The Listed Company shall immediately disclose to the stock exchanges any adverse opinion, disclaimer of opinion, qualified opinion by the auditors on the financial statements of, –

i. the Listed Company; or

ii. any of the Listed Company‘s subsidiaries or associated companies, if the adverse opinion, disclaimer of opinion, qualified opinion has a material impact on the company‘s consolidated accounts.

138. (1) IFSCA or the stock exchange may require a Listed Company to appoint an auditor to review or investigate the company‘s affairs and report its findings to the stock exchange or the company‘s Audit Committee.

(2) The Listed Company may be required by IFSCA or the stock exchange to immediately disclose the appointment of auditor or disclose the findings of the auditor.

139. (1) The promoters and the controlling shareholders of the Listed Company shall disclose details of any encumbrance of specified securities of the Listed Company created or invoked or released, within two working days of such creation, or invocation or release, as the case may be, to:

(a) The recognised stock exchange (s); and

(b) The Listed Company.

(2) The Listed Company shall ensure that the disclosures received under sub-regulation (1) are immediately disclosed to the recognised stock exchange(s).

Periodic Disclosures

140. The Listed Company shall submit to the stock exchange(s) shareholding pattern of the company, in the format specified by the IFSCA or the stock exchange(s) on a quarterly basis, within twenty-one days from the end of each quarter.

141. The Listed Company shall disclose to the stock exchange(s) the audited standalone and consolidated financial statements for the full financial year immediately after finalisation of the accounts, but in any event not later than six months of the end of financial year.

142. The Listed Company shall disclose to the stock exchange(s) the financial statements for each of the first three quarters of its financial year immediately after the finalisation of the accounts, but in any event not later than 45 days after the quarter end.

143. The Listed Company shall prepare their statement of accounts in accordance with IFRS or US GAAP or Ind AS or accounting standards as applicable in its jurisdiction of incorporation.

144. (1) The Listed Company shall submit to the stock exchange and publish on its website a copy of the annual report sent to the shareholders along with the notice of the annual general meeting not later than the day of commencement of dispatch to its shareholders.

(2) The annual report shall contain the following:

a) Audited standalone and consolidated financial statements;

b) Directors report

c) Management discussion and analysis report

d) Corporate Governance practices

e) Sustainability Report, if applicable; and

f) Mandatory requirements as specified in the laws of the jurisdiction of incorporation

Statement of deviation(s) or variation(s)

145. (1) The Listed Company shall submit to the stock exchange the statement(s) of deviation (indicating category wise variation between projected utilisation of funds made by it in its offer document), if any, in the use of proceeds from the objects stated in the offer document on a quarterly basis for public issue:

Provided that the start-up and SME companies shall be required to submit the statement of deviation(s) or variations(s) on half yearly basis.

(2) The statement(s) specified in sub-regulation (1), shall be continued to be given till such time the issue proceeds have been fully utilised or the purpose for which these proceeds were raised has been achieved.

(3) The statement(s) specified in sub-regulation (1), shall be placed before the audit committee for review and after such review, shall be submitted to the stock exchange(s).

(4) The Listed Company shall furnish an explanation for the variation specified in sub-regulation (1), in the directors‘ report in the annual report.

Corporate Governance

146. The Listed Company shall describe its corporate governance practices in its annual report, in the manner specified by the laws of the jurisdiction of its incorporation.

Sustainability Report

147. (1) The Listed Company shall disclose to the stock exchanges a sustainability report with respect to environmental, social and governance factors for its financial year, no later than 6 months after the end of the financial year:

Provided that this clause shall not apply to companies having market capitalisation less than USD 50 million.

(2) The sustainability report specified in sub-regulation 1 shall be based on:

(a) internationally accepted reporting frameworks such as Global Reporting Initiative, Sustainability Accounting Standards Board, Task Force on Climate-related Financial Disclosures, Integrated Reporting or any other standards that may be specified by recognised stock exchange(s) or IFSCA; or

(b) standards prescribed by Ministry of Corporate Affairs, Government of India from time to time.

Corporate actions

148. The Listed Company shall inform the stock exchange(s) in advance of any proposed corporate action.

149. The Listed Company shall give notice of the record date to the stock exchange(s), wherever applicable, in advance of at least three working days specifying the purpose of the record date.

Meetings of shareholders and voting

150. (1) The Listed Company shall provide the facility of remote e-voting facility to its shareholders, in respect of all shareholders’ resolutions.

(2) The Listed Company shall submit to the stock exchange, within forty eight hours of conclusion of its General Meeting, details regarding the voting results.

(3) The Listed Company shall send proxy forms to holders of securities in all cases mentioning that a holder may vote either for or against each resolution.

(4) The Listed Company shall provide one-way live webcast of the proceedings of the annual general meetings. Website

151. The Listed Company shall maintain a functional website containing basic information about the company including details about business, board of directors, key managerial personnel, compliance officer, financial statements, e-mail address for grievance redressal and annual reports.

Dissemination by stock exchanges

152. The stock exchanges shall ensure that the disclosures made by the Listed Companies are immediately disseminated on their websites.

PART C: SECONDARY LISTING OF SPECIFIED SECURITIES

153. The issuer with secondary listing of specified securities on a recognised stock exchange (s) shall comply with the following requirements:

a) maintain the listing of the specified securities on its home exchange and abide by the listing (or other) rules of such exchange and regulator;

b) release all disclosures in English to the recognised stock exchange(s) at the same time as they are released to its home exchange or regulator where it has a primary listing; and

c) comply with such other requirements as may be specified by IFSCA or recognised stock exchange(s) from time to time.

PART D – LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS FOR COMPANIES HAVING DEPOSITORY RECEIPTS LISTED ON RECOGNISED STOCK EXCHANGES

Financial Statements

154. The Listed Company shall disclose to the recognised stock exchange(s) the audited financial statements for the full financial year immediately, but not later than 24 hours, after the finalisation of accounts, but in any event not later than six months of the end of financial year.

155. The Listed Company shall disclose to the recognised stock exchange(s) the financial statements for each of the first three quarters of its financial year immediately after the finalisation of accounts, but in any event not later than 45 days after the quarter.

156. The Listed Company shall prepare their statement of accounts in accordance with IFRS or US GAAP or Ind AS or accounting standards as applicable in its jurisdiction of incorporation.

Disclosure of material or price sensitive events

157. The Listed Company shall immediately disclose to the recognised stock exchange(s) all events which are material or price sensitive.

Shareholding pattern

158. The Listed Company shall submit to the recognised stock exchange(s) shareholding pattern of the company, in the format specified by IFSCA or the stock exchange(s) on a quarterly basis, within twenty-one days from the end of each quarter.

Corporate Governance

159. The Listed Company shall describe its corporate governance practices in its annual report, in the manner specified by the laws in its home jurisdiction.

Change of depository

160. (1) Any change of depository by the Listed Company shall be with the prior approval of the recognised stock exchange(s).

(2) The Listed Company shall disclose the change of depository within 24 hours, to the recognised stock exchange(s).

Corporate actions

161. The Listed Company shall inform the recognised stock exchange(s) in advance of any proposed corporate action pertaining to the depository receipts or the underlying securities.

162. The Listed Company shall give notice of the record date to the recognised stock exchange(s), wherever applicable, in advance of at least three working days specifying the purpose of the record date.

Other compliances

163. The Listed Company shall comply with the following requirements:

a) maintain the listing of the underlying specified securities on its home exchange and abide by the listing (or other) rules of such exchange and regulator;

b) release all disclosures in English to the stock exchange(s) at the same time as they are released to its home exchange or regulator where it has a primary listing; and

c) comply with such other requirements as may be specified by the Authority or stock exchange(s) from time to time.

Voting Rights

164. The voting rights of the DR holders shall be exercised in accordance with the depository agreement.

Dissemination by stock exchanges

165. The recognised stock exchanges shall ensure that the disclosures made by the Listed Companies are immediately disseminated on their websites.

PART E – LISTING OBLIGATIONS AND CONTINUOUS DISCLOSURE REQUIREMENTS FOR DEBT SECURITIES

Disclosure of material or price sensitive events

166. (1) The issuer shall immediately disclose to the stock exchange(s) all events which are material or price sensitive.

(2) The issuer shall immediately disclose to the stock exchange(s) the following events:

a) any redemption or cancellation of the debt securities;

b) details of any interest payment(s) to be made (except if the debt securities are fixed rate);

c) any buy back or put option exercised; and

d) any delay in payment of principal and/or interest amount.

Financial Statements

167. The issuer shall disclose to the stock exchange(s) the audited financial statements for the full financial year immediately after the finalisation of accounts, but in any event not later than six months of the end of financial year.

168. The issuer shall prepare their statement of accounts in accordance with IFRS or US GAAP or Ind AS or accounting standards as applicable in its jurisdiction of incorporation.

Annual Report

169. The issuer shall submit to the recognised stock exchange a copy of the annual report immediately after the finalisation of the same, but in any event not later than six months of the end of financial year.

Credit Rating

170. The issuer shall immediately disclose to the stock exchange any revision in the credit rating.

Record Date

171. The issuer shall disclose the record date relevant for the holders of debt securities in a timely manner.

Exempt Issuers

172. The recognised stock exchange(s) may relax some of the requirements from this chapter for the following exempt issuers:

(a) Supranational, multilateral or statutory institutions /organizations /agencies; and

(b) Entities whose securities are irrevocably guaranteed by a Sovereign; and

(c) Any other entity as may be specified by the Authority from time to time.

CHAPTER XII: PERMITTED TO TRADE (WITHOUT LISTING)

173. The stock exchange(s) may permit trading of securities listed on an exchange in India or in a Foreign Jurisdiction, subject to the following conditions:

a) Such trading of securities, without listing on the recognised stock exchange(s), is in accordance with the applicable laws of the jurisdictions in which the securities are listed; and

b) The stock exchange(s) shall ensure clearing and settlement of the trades.

174. Such securities that are permitted to trade by the stock exchange(s), without listing by the company, shall not be considered as listed on the stock exchange(s) in IFSC for the purpose of these regulations.

CHAPTER XIII: MISCELLANEOUS

Listing agreement

175. The company desirous of listing its specified securities on a stock exchange(s) in IFSC shall execute a listing agreement with such stock exchange(s), in the manner provided by the stock exchange(s).

Refusal of admission to list

176. The stock exchange(s), in its discretion, may reject an application for admission to list securities if it considers that

a) listing of securities would be detrimental to investors’ interests; or

b) the issuer does not comply or will not comply with any requirement specified by IFSCA or the recognised stock exchange(s).

Suspension

177. The stock exchange(s) may suspend the trading of securities where it appears that:

a) the issuer is in non-compliance with the regulatory provisions specified by the Authority or the recognised stock exchange(s); or

b) the issuer has been suspended for trading of its securities by any other exchange;

c) the suspension is required for ensuring orderly operation of its market.

178. The stock exchange(s) may restore trading of securities that have been suspended if it considers that the suspension is no longer required.

Voluntary Delisting

179. The stock exchange(s) may delist securities, based on request received from the company, in the manner that may be specified by the recognised stock exchange(s) or IFSCA.

Compulsory Delisting

180. The stock exchange(s) may compulsorily delist securities of the issuer on the following conditions:

a) The securities have remained suspended for a period of more than six months;

b) the securities have been compulsorily delisted from another exchange;

c) if the exchange is satisfied that there are special circumstances that require delisting of the securities; or

d) it is directed to do so by IFSCA or any other relevant authority or any court order of applicable jurisdiction.

Submission of information

181. The issuer shall provide any information sought by IFSCA or the stock exchange(s) relating to securities market.

Power to relax strict enforcement of the regulations

182. (1) IFSCA may, in the interest of investors or for the development of the securities market, relax the strict enforcement of any requirement of these regulations.

(2) For seeking relaxation under sub-regulation (1), an application, giving details and the grounds on which such relaxation has been sought, shall be filed with IFSCA.

(3) The application referred to under sub-regulation (2) shall be accompanied by a non-refundable fee in the manner as may be specified by IFSCA.

Power to remove difficulty

183. In order to remove any difficulties in the application or interpretation of these regulations, IFSCA may issue clarifications through guidance notes or circulars after recording reasons in writing.

Repeal and Savings

184. (1) On and from the commencement of these regulations, the provisions relating to issuance and listing of specified securities and debt securities specified under Securities and Exchange Board of India (International Financial Services Centres) Guidelines, 2015 shall stand superseded.

(2) The IFSCA circular F. No. 87/IFSCA/DRs/2020-21 dated October 28,2020 shall stand superseded from the date of commencement of these regulations.

(3) Notwithstanding (1) and (2) above, anything done or any action taken or purported to have been taken under the Securities and Exchange Board of India (International Financial Services Centres) Guidelines, 2015 or IFSCA circular F. No. 87/IFSCA/DRs/2020-21 dated October 28,2020 before the commencement of these regulations shall be deemed to have been done or taken or commenced under the corresponding provisions of these regulations.

INJETI SRINIVAS, Chairperson
[ADVT.-III/4/Exty./155/2021-22]