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SEBI streamlines the framework for schemes of arrangement for listed companies

SEBI streamlines the framework for schemes

In this issue of First Notes, we provide an overview of SEBI amendments relating to schemes of arrangements.

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Background

Companies with listed specified securities (i.e. equity shares and convertible securities) are required to comply with the provisions of the Securities and Exchange Board of India (SEBI) (Listing Obligations and Disclosure Requirements) Regulations, 2015 (LODR) and the Companies Act, 2013 (2013 Act) while undertaking any scheme of arrangement including amalgamation, merger, reconstruction and reduction of capital.

Further, SEBI through its circular dated 10 March 2017 has laid down detailed requirements to be complied with by listed companies while undertaking schemes of arrangements.

Recent development

On 3 November 2020, SEBI has made certain amendments to the regulatory framework for schemes of arrangements by listed companies (laid down in its circular dated 10 March 2017). The amendments relate to the following areas:

  • Documents to be submitted by the listed company to the stock exchanges before the scheme is submitted to the National Company Law Tribunal (NCLT)
  • Obligations of the stock exchange(s) and processing of the draft scheme by SEBI
  • Conditions for companies seeking relaxation under Rule 19(7) of the Securities Contracts (Regulation) Rules, 1957.

In this issue of First Notes, we provide an overview of these amendments.

To access the text of the SEBI circular, please click here.

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