Regulatory updates

Regulation 30(11) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (LODR Regulations) requires mandatory confirmation, denial or clarification of any reported event or information in the mainstream media (which is not general in nature), and which indicates that rumours of an impending specific material event or information are circulating amongst the investing public.

These requirements were applicable to top 100 listed entities by market capitalisation* w.e.f. 1 October 2023 and top 250 listed entities w.e.f. 1 April 2024. In September 2023, SEBI had extended the timeline for top 100 and 250 listed entities to 1 February 2024 and 1 August 2024 respectively.

SEBI, vide a circular dated 25 January 2024 has now again extended the aforementioned timelines in the manner given below:

* As per market capitalisation as at the end of the immediately preceding financial year

To access the text of the circular, please click here

Offer For Sale (OFS) is a mechanism used by large promoters of eligible listed companies in India to offer their shares to investors through an auction process. The OFS is generally done through a stock exchange platform⁸ SEBI, vide the Master Circular dated 16 October 2023 has prescribed the comprehensive framework on OFS of shares through stock exchange mechanism. . Currently, OFS through the stock exchange is available to retail investors, institutional investors, etc. (but not to employees).

The existing procedure of OFS to employees takes place outside the stock exchange mechanism and is time consuming, involves additional costs and multiple activities. Thus, in order to address these concerns, SEBI, on 23 January 2024, issued the framework for OFS of shares to employees through stock exchange mechanism (the framework). The framework provides an additional option to the existing OFS procedure to offer shares to the employees outside the stock exchange mechanism.

Effective date: The circular would come into effect from the 30th day of issuance of the circular (i.e. 22 February 2024).

To access the text of the circular, please click here

On 5 January 2024, SEBI amended the SEBI (Alternative Investment Funds) Regulations, 2012 (“AIF Regulations”) with respect to AIFs holding their investments in dematerialised form and appointment of a custodian.
Subsequent to this, SEBI vide a circular dated 12 January 2024 has issued guidelines for AIFs with respect to holding their investments in dematerialised form and appointment of custodian (the guidelines). The guidelines inter-alia provide the following:

• Holding investments of AIFs in dematerialised form

• Any investment made by an AIF on or after 1 October 2024 , must be in dematerialised form. This applies irrespective of whether the investment is made directly in the investee company or acquired from another entity.
• The investments made by an AIF prior to 1 October 2024 are exempted from the requirement of being held in dematerialised form, except in certain cases.

• Appointment of custodian for AIFs

• The custodian for a scheme of an AIF should be appointed prior to the date of first investment of the scheme.
• Existing schemes of Category I and II AIFs having corpus less than or equal to INR500 crore and holding at least one investment as on date of this circular should appoint custodian on or before 31 January 2025.

• Reporting of investments of AIFs under custody

• Managers of AIFs and custodians should adopt and adhere to implementation standards formulated by the Standard Setting Forum for AIFs (“SFA”) in consultation with SEBI.

To access the text of the notification amending the AIF regulations, please click here

To access the text of the guidelines, please click here