Comprehensive Guidelines on Offer For Sale (OFS) of
Shares by Promoters through the Stock Exchange Mechanism
CIRCULAR, CIR/MRD/DP/04/2013,
dated January 25, 2013
1.Comprehensive guidelines on sale of shares through OFS mechanism were issued
vide circular no CIR/MRD/DP/18/2012 dated July 18, 2012. Based on past
experience of sale of shares through OFS, the mechanism of OFS has been found
to be useful by market participants and popular for offloading shares of
promoters in listed companies in order to achieve minimum public shareholding.
With the deadline of June 2013 to achieve minimum public shareholding
approaching, to encourage promoters to offload their shares through OFS route
and based on market feedback, it has been decided to modify the OFS framework
to make it more economical, efficient and transparent.
2.
The aforesaid circular is amended as under:
2.1. Para 1 (b) (ii) shall be
replaced by the following:
All promoters/promoter group
entities of top 100 companies by market capitalisation in any of the last four
completed quarters, market capitalisation being calculated as average market capitalisation
in a quarter.
2.2. Para 2(c) shall be replaced
by the following:
Indicative Price is the volume
weighted average price of all the valid bids.
2.3. Para 5(d) (ii) shall be
replaced by the following:
Orders shall be placed during
trading hours.
2.4. Para 5 (d) (iii) shall be
omitted.
2.5. Para 5(e) (i) shall be
replaced by the following:
A separate window for the purpose
of sale of shares through OFS shall be created. The following orders shall be
valid in the OFS window:
A. Orders with 100% of margin
paid upfront by institutional investors and non-institutional investors. Such
orders can be modified or canceled at any time during the trading hours.
B. Orders without paying upfront
margin by institutional investors only. Such orders cannot be modified or
cancelled by the investors or stock brokers, except for making upward revision
in the price or quantity.
2.6. Para 5 (e) (ii) shall be
replaced by the following:
Cumulative bid quantity shall be
made available online to the market throughout the trading session at specific
intervals in respect of orders with 100% upfront margin and separately in
respect of orders placed without any upfront margin. Indicative price shall be
disclosed to market throughout the trading session. The indicative price shall
be calculated based on all valid bids/orders.
2.7. Para 6 (a) shall be replaced
by the following:
Clearing Corporation shall
collect 100% margin in cash from non-institutional investors. In case of
institutional investors who place orders/bids with 100% of margin upfront,
custodian confirmation shall be within trading hours. In case of institutional
investors who place orders without upfront margin, custodian confirmation shall
be as per the existing rules for secondary market transactions. The funds
collected shall neither be utilized against any other obligation of the trading
member nor co-mingled with other segments.
2.8. Para 6 (b) shall be replaced
by the following:
In case of order/bid modification
or cancellation, such funds shall be released/ collected on a real time basis
by clearing corporation.
2.9. Para 8 (i) (b) shall be
replaced by the following:
Settlement shall take place on trade
for trade basis. For non-institutional orders/bids and for institutional orders
with 100% margin, settlement shall take place on T+1 day. In case of
orders/bids of institutional investors with no margin, settlement shall be as
per the existing rules for secondary market.
2.10. Para 8 (ii) (a) shall be
replaced by the following:
In case of default in pay-in by
any investor, 10% of the order value shall be charged as penalty from the
investor and collected from the broker. This amount shall be credited to the
Investor Protection Fund of the stock exchange.
3.
All other conditions for sale of shares through OFS framework shall be as per
SEBI circular CIR/MRD/DP/18/2012 dated July 18, 2012.
4.
Stock Exchanges are directed to:
4.1. take necessary steps and put
in place necessary systems for implementation of the above.
4.2. make necessary amendments to
the relevant bye-laws, rules and regulations for the implementation of the
above decision.
4.3. bring the provisions of this
circular to the notice of the member brokers of the stock exchange to also to
disseminate the same on their website.
5.
This circular is being 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.
0 comments:
Post a Comment