Securities and Exchange Board of India (SEBI) has withdrawn the Master Circular on the issuance of a No Objection Certificate (NOC) for the release of 1% of the issue amount. This follows the amendment to Regulation 38(1) of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 (ICDR Regulations), notified on May 17, 2024. The amendment eliminates the requirement for issuer companies to deposit 1% of the issue size with the designated stock exchange during public subscription. Consequently, the earlier circular dated November 7, 2022, is no longer applicable.
Stock exchanges are instructed to jointly establish a standard operating procedure (SOP) for handling 1% security deposits made by issuers before the amendments. Exchanges must notify listed companies of this update, publish it on their websites, and amend their bye-laws, rules, and regulations as needed.
This circular is effective immediately and aims to ease the compliance burden on issuers while ensuring regulatory clarity. It has been issued under Section 11(1) of the SEBI Act, 1992, to protect investor interests and regulate the securities market. For further details, refer to SEBI’s official website under the “Legal→ Circulars” section.
Securities and Exchange Board of India
Circular No. SEBI/HO/CFD/CFD-PoD-2/P/CIR/2024/0161 Dated: November 21, 2024
To,
All listed entities
All Recognized Stock Exchanges
All registered Merchant Bankers
Madam / Sir,
Subject: Withdrawal of Master Circular on issuance of No Objection Certificate (NOC) for release of 1% of Issue Amount
1. In order to facilitate ease of doing business to Issuer company, the requirement to deposit 1% of the issue size available for subscription to the public with the designated stock exchange by the Issuer company under regulation 38 (1) of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 (ICDR Regulations) has been dispensed with.
2. Consequent to amendment of ICDR Regulations vide gazette notification dated May 17th 2024, the Master Circular no. SEBI/HO/OIAE/IGRD/P/CIR/2022/0151 dated November 07, 2022 on Issuance of No Objection Certificate for release of 1% of Issue Amount stands withdrawn.
3. However, the Stock Exchanges shall frame a joint standard operating procedure (SoP) for release of 1% security deposit that were deposited with stock exchanges by the issuer prior to abovementioned amendments in ICDR Regulations, 2018.
4. The circular shall be applicable with immediate effect.
5. The Stock Exchanges are accordingly advised to:
a. bring the provisions of this circular to the notice of all the companies whose securities are listed in the exchange and also to disseminate the same on the website of the stock exchange.
b. make amendments to the relevant bye-laws, rules and regulations for the implementation of the terms of this circular, if necessary.
6. This Circular is issued in exercise of powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992 to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.
7. This Circular is available at sebi.gov.in under the link “Legal→ Circulars”.
Yours faithfully,
Raj Kumar Das
Deputy General Manager
Corporation Finance Department
Policy and Development-2
+91-22-26449253
[email protected]
