The Securities and Exchange Board of India (SEBI) has issued Circular No. SEBI/HO/CFD/TPD1/CIR/P/2023/140 on August 09, 2023, announcing a reduction in the timeline for listing shares in public issues. The circular aims to streamline the process and enhance efficiency in the issuance of specified securities.
Analysis: Following extensive consultation and considering public comments, SEBI has decided to shorten the time required for listing specified securities after the closure of a public issue from the existing T+6 days to T+3 days. This reduction aims to expedite the listing process and aligns with market dynamics.
The circular also introduces changes in various activities related to the public issue process. It emphasizes that the T+3 timeline for listing should be disclosed in the Offer Documents of public issues. Additionally, SEBI has modified the compensation calculation for investors in case of delays in unblocking ASBA application monies, which will now be computed from T+3 days.
The circular also outlines instructions for Direct Bank ASBA and Syndicate ASBA applications, ensuring proper verification of PAN information linked to bank accounts. The Registrar to an Issue is required to verify PAN details by matching the PAN available in the demat account with the PAN in the bank account.
Furthermore, the circular clarifies the applicability of these changes, both on a voluntary basis and as mandatory requirements, for public issues opening on or after specific dates.
Conclusion: SEBI’s Circular No. SEBI/HO/CFD/TPD1/CIR/P/2023/140 marks a significant step toward enhancing the efficiency of the public issue listing process. By reducing the timeline from T+6 days to T+3 days, SEBI aims to create a more streamlined and investor-friendly process while maintaining regulatory standards.
Securities and Exchange Board of India
Circular No. SEBI/HO/CFD/TPD1/CIR/P/2023/140 Dated: August 09, 2023
To
Recognized Stock Exchanges
Depositories
Registered Stock Brokers
Registered Merchant Bankers
Registered Registrars to an Issue and Share Transfer Agents
Registered Depository Participants
Registered Bankers to an Issue
Self Certified Syndicate Banks (SCSBs)
National Payments Corporation of India (NPCI)
Dear Sir / Madam,
Sub: Reduction of timeline for listing of shares in Public Issue from existing T+6 days to T+3 days
1. Consequent to extensive consultation with the market participants and considering the public comments received pursuant to consultation paper on the aforesaid subject matter, it has been decided to reduce the time taken for listing of specified securities after the closure of public issue to 3 working days (T+3 days) as against the present requirement of 6 working days (T+6 days); ‘T’ being issue closing date.
2. Accordingly, the revised timelines for listing of specified securities and various activities involved in the public issue process are specified in Annexure to this circular.
3. The T+3 timeline for listing shall be appropriately disclosed in the Offer Documents of public issues.
4. The timelines for submission of application, allotment of securities, unblocking of application monies and listing shall prominently be made a part of pre-issue, issue opening and issue closing advertisements issued by the Issuer for public issues in terms of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 (“ICDR Regulations”).
General Instructions:
5. For Direct Bank ASBA and Syndicate ASBA applications, prior to blocking of ASBA application monies in the bank account of the applicant, the SCSBs shall ensure the following:
(i) The PAN mentioned in the application matches with the PAN linked to the bank account of the applicant maintained with the bank.
A confirmation on the above shall be submitted by SCSBs to the Registrar to an Issue along with the Final Certificate.
(ii) The PAN linked to the bank account of the applicant shall be part of the bidding data on the Stock Exchange platform.
6. The Registrar to an Issue shall undertake third-party verification of the applications by matching the PAN available in the demat account with the PAN available in the bank account of the applicant. In instances of mismatch, such applications shall continue to be considered as invalid applications for finalising the basis of allotment.
7. Lock-in of pre-issue shares shall be made effective in compliance with ICDR Regulations. Further, the operationalization of lock-in shall be in line with the Standard Operating Procedure (SOP) of Depositories issued vide circular/communique dated August 08, 2023.
8. In partial modification to circulars dated March 16, 2021 and April 20, 2022, the compensation to investors for delay in unblocking of ASBA application monies (if any) shall be computed from T+3 day.
Applicability of this circular
9. Notwithstanding anything contained in Schedule VI of the ICDR Regulations, the provisions of this circular shall be applicable:
– On voluntary basis for public issues opening on or after September 1, 2023 and
– Mandatory for public issues opening on or after December 1, 2023.
10. The timelines prescribed for public issues as mentioned in SEBI circulars dated November 1, 2018, June 28, 2019, November 8, 2019, March 30, 2020, March 16, 2021, June 2, 2021, and April 20, 2022 shall stand modified to the extent stated in this Circular.
11. This Circular is being issued in exercise of the powers conferred under section 11 and section 11A of the Securities and Exchange Board of India Act, 1992.
12. This circular is available on SEBI website at www.sebi.gov.in under the category: ‘Legal → Circulars’.
Yours faithfully,
E Balasubramanian
General Manager
+91-22-26449195
[email protected]
ANNEXURE
Indicative timeline of activities for listing of shares through Public Issues on T+3 day
|
Sequence of Activities |
Listing within T+3 days (T is Issue Closing Date) |
| Application Submission by Investors | Electronic Applications (Online ASBA through 3-in-1 accounts) – Upto 5 pm on T day.
Electronic Applications (Bank ASBA through Online channels like Internet Banking, Mobile Banking and Syndicate UPI ASBA etc) – Upto 4 pm on T day. Electronic Applications (Syndicate Non-Retail, Non- Individual Applications) – Upto 3 pm on T day. |
| Physical Applications (Bank ASBA) – Upto 1 pm on T day.
Physical Applications (Syndicate Non-Retail, Non- Individual Applications of QIBs and NIIs) – Upto 12 pm on T day and Syndicate members shall transfer such applications to banks before 1 pm on T day. |
|
| Bid Modification | From Issue opening date up to 5 pm on T day |
| Validation of bid details
with depositories |
From Issue opening date up to 5 pm on T day |
| Reconciliation of UPI
mandate transactions (Based on the guidelines Among Stock Exchanges – Sponsor Banks – NPCI and NPCI – PSPs/TPAPs** – Issuer Banks; Reporting formats of bid information, UPI analysis report and compliance |
On Daily basis
Merchant Bankers to submit to SEBI, as and when sought. |
| UPI Mandate acceptance time | T day – 5 pm |
| Issue Closure | T day – 4 pm for QIB and NII categories
T day – 5 pm for Retail and other reserved categories |
| Third party check on UPI applications | On daily basis and to be completed before 9:30 AM on T+1 day. |
| Third party check on Non-UPI applications. | On daily basis and to be completed before 1 pm on T+1 day. |
| Submission of final
certificates: -For UPI from Sponsor Bank – For Bank ASBA, from all SCSBs – For syndicate ASBA |
UPI ASBA – Before 09:30 pm on T day.
All SCSBs for Direct ASBA – Before 07:30 pm on T day Syndicate ASBA – Before 07:30 pm on T day |
| Finalization of rejections and completion of basis | Before 6 pm on T+1 day. |
| Approval of basis by Stock Exchange | Before 9 pm on T+1 day. |
| Issuance of fund transfer
instructions in separate files for debit and For Bank ASBA and Online ASBA – To all For UPI ASBA – To Sponsor Bank |
Initiation not later than 09:30 am on T+2 day; Completion before 2 pm on T+2 day for fund transfer; Completion before 4 pm on T+2 day for unblocking. |
| Corporate action execution for credit of shares |
Initiation before 2 pm on T+2 day Completion before 6 pm on T+2 day |
| Filing of listing application with Stock Exchanges and issuance of trading notice |
Before 7:30 pm on T+2 day |
| Publish allotment advertisement | On website of Issuer, Merchant Banker and RTI – before 9 pm on T+2 day.
In newspapers – On T+3 day but not later than T+4 day |
| Trading starts | T+3 day |
**PSPs/TPAPs = Payment Service Providers/Third Party Application Providers.
