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Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) (Amendment) Regulations, 2020 are notified by SEBI on 16th June 2020 vide Notification No. SEBI/LAD-NRO/GN/2020/14. Vide this Notification SEBI has amended sub-regulation (2) of Regulation 3 and sub-regulation (1) of Regulation 6. Analysis of SEBI (SAST) Amendment Regulation, 2020 is as follows:-
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| Reg. 3(1) | No acquirer along with PAC shall acquire share or voting rights in a target company taken together with shares or voting rights held by him or together with PAC entitled them to exercise 25% or more, unless a Public announcement has made. | Reg. 3(1) | No acquirer along with PAC shall acquire share or voting rights in a target company taken together with shares or voting rights held by him or together with PAC entitled them to exercise 25% or more, unless a Public announcement has made. |
| Reg. 3(2) | No acquirer along with PAC shall acquire share or voting rights in a target company taken together with shares or voting rights held by him or together with PAC entitled them to exercise 25% or more but less than maximum permissible non public shareholding , in any financial year additional shares or voting rights entitled them to exercise more than 5% of the voting right unless acquirer makes a public announcement. | Reg. 3(2) | No acquirer along with PAC shall acquire share or voting rights in a target company taken together with shares or voting rights held by him or together with PAC entitled them to exercise 25% or more but less than maximum permissible non public shareholding , in any financial year additional shares or voting rights entitled them to exercise more than 5% of the voting right unless acquirer makes a public announcement. |
| Proviso | Provided that acquirer shall not be entitled to acquire or enter into any agreement to acquire shares or voting rights exceeding such number of shares as would take the aggregate shareholding pursuant to the acquisition above the maximum permissible non-public shareholding. | New Proviso | Provided that the acquisition beyond five per cent but upto ten per cent of the voting rights in the target company shall be permitted for the financial year 2020-21 only in respect of acquisition by a promoter pursuant to preferential issue of equity shares by the target company.” |
| Reg 3(3) | Acquisition of shares by any person in sub regulation (1) & (2) , such that individual shareholding of such person exceeds stipulated threshold limit, shall also attached an obligation to make an open offer for acquiring shares of the target company. | Existing Proviso | Provided that acquirer shall not be entitled to acquire or enter into any agreement to acquire shares or voting rights exceeding such number of shares as would take the aggregate shareholding pursuant to the acquisition above the maximum permissible non-public shareholding. |
| Reg. 3(4) | The provisions of this regulations shall not applicable to acquisition of shares or voting rights of a company by the promoters or shareholders in control, in terms of the chapter VI-A of SEBI (ICDR) Regulations, 2011. | Reg 3(3) | Acquisition of shares by any person in sub regulation (1) & (2) , such that individual shareholding of such person exceeds stipulated threshold limit, shall also attached an obligation to make an open offer for acquiring shares of the target company. |
| Reg. 3(4) | The provisions of this regulations shall not applicable to acquisition of shares or voting rights of a company by the promoters or shareholders in control, in terms of the chapter VI-A of SEBI (ICDR) Regulations, 2011. |
| Reg. 6(1) | An acquirer, who together with persons acting in concert with him, holds shares or voting rights in a target company entitling them to exercise 25% or more but less than the maximum permissible non-public shareholding, shall be entitled to voluntarily make a public announcement of an open offer for acquiring shares in accordance with these regulations, subject to their aggregate shareholding after completion of the open offer not exceeding the maximum permissible non – public shareholding: | Reg. 6(1) | An acquirer, who together with persons acting in concert with him, holds shares or voting rights in a target company entitling them to exercise 25% or more but less than the maximum permissible non-public shareholding, shall be entitled to voluntarily make a public announcement of an open offer for acquiring shares in accordance with these regulations, subject to their aggregate shareholding after completion of the open offer not exceeding the maximum permissible non – public shareholding: |
| 1st Proviso | Provided that where an acquirer or any person acting in concert with him has acquired shares of the target company in the preceding 52 weeks without attracting the obligation to make a public announcement of an open offer, he shall not be eligible to voluntarily make a public announcement of an open offer for acquiring shares under this regulation | 1st Proviso | Provided that where an acquirer or any person acting in concert with him has acquired shares of the target company in the preceding 52 weeks without attracting the obligation to make a public announcement of an open offer, he shall not be eligible to voluntarily make a public announcement of an open offer for acquiring shares under this regulation |
| 2nd Proviso | Provided further that during the offer period such acquirer shall not be entitled to acquire any shares otherwise than under the open offer. | New Point insert | The relaxation from the first proviso is granted till March 31, 2021 |
| Reg. 6(2) | An acquirer and PAC with him, shall not entitled to acquire any share of the target company for a period of 6 Months after completion of Offer except pursuant to another Voluntary offer. | Reg. 6(2) | An acquirer and PAC with him, shall not entitled to acquire any share of the target company for a period of 6 Months after completion of Offer except pursuant to another Voluntary offer. |
| Proviso | Provided that such restriction shall not prohibit the acquirer from making a competing offer upon any other person making an open offer for acquiring shares of the target company | Proviso | Provided that such restriction shall not prohibit the acquirer from making a competing offer upon any other person making an open offer for acquiring shares of the target company |
| Reg 6(3) | Shares acquired through bonus issue or stock splits shall not be considered for purposes of the dis-entitlement set out in this regulation. | Reg 6(3) | Shares acquired through bonus issue or stock splits shall not be considered for purposes of the dis-entitlement set out in this regulation. |
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