CAPITAL MARKETS &

SECURITIES LAW
PART 1
(Part 2 containing Depository & ICDR Regulations will
be release in Last week of February 2019)

CS EXECUTIVE OLD/NEW SYLLABUS

AMENDMENTS APPLICABLE TO JUNE 2019
All Amendments till 31.12.2018 are applicable

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Sr. No Section Old Provision New Provision Effect
SEBI (LISTING OBLIGATIONS & DISCLOSURE REQUIREMENTS) REGULATIONS
1. Regulation 2(1)(ia) NA “fugitive economic offender” shall mean an
w.e.f 16.11.2018 individual who is declared a fugitive economic
offender under section 12 of the Fugitive
Economic Offenders Act, 2018

2. Regulation 2(1) NA “security receipts” shall have the meaning

(zga) assigned to it under the Securities and
w.e.f. Exchange Board of India (Issue and Listing of
06.09.2018 Securitized Debt Instruments and Security
Receipts) Regulations, 2008;

3. Regulation 3 Unless otherwise provided, these
regulations shall apply to the listed
entity who has listed any of the following
designated securities on recognized
stock exchange(s):
(a) specified securities listed on main
board or SME Exchange or institutional
trading platform;
(b) non-convertible debt securities, non-
convertible redeemable preference
shares, perpetual debt instrument,
perpetual non-cumulative preference
shares;
(c) Indian depository receipts;
(d) securitized debt instruments;
(e) units issued by mutual funds;
(f) any other securities as may be
specified by the Board.
Unless otherwise provided, these regulations Clause (da)
shall apply to the listed entity who has listed Inserted
any of the following designated securities on
recognized stock exchange(s):
(a) specified securities listed on main board or
SME Exchange or institutional trading
platform;
(b) non-convertible debt securities, non-
convertible redeemable preference shares,
perpetual debt instrument, perpetual non-
cumulative preference shares;
(c) Indian depository receipts;
(d) securitized debt instruments;
(da) Security Receipts;
(e) units issued by mutual funds;
(f) any other securities as may be specified by
the Board.

4. Regulation 31(4) NA (4) All entities falling under promoter and

Inserted w.e.f promoter group shall be disclosed
16.11.2018 separately in the shareholding pattern
appearing on the website of all stock

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 exchanges having nationwide trading
terminals where the specified securities of
the entity are listed, in accordance with the
formats specified by the Board.

5. Regulation 31A (1) For the purpose of this regulation:

RE- (a) “promoter(s) seeking re-classification” shall mean all such promoters/persons
CLASSIFICATION belonging to the promoter group seeking re-classification of status as public.
OF ANY PERSON
AS PROMOTER / (b) “persons related to the promoter(s) seeking re-classification” shall mean such persons
PUBLIC with respect to that promoter(s) seeking re-classification who fall under sub-clauses
(ii), (iii) and (iv) of clause (pp) of sub-regulation (1) of regulation 2 of Securities and
inserted Exchange Board of India(Issue of Capital and Disclosure Requirements) Regulations,
w.e.f. 2018.
16.11.2018
(2) Re-classification of the status of any person as a promoter or public shall be
permitted by the stock exchanges only upon receipt of an application from the
listed entity along with all relevant documents subject to compliance with
conditions specified in these regulations; Provided that in case of entities listed on
more than one stock exchange, the concerned stock exchanges shall jointly decide on
the application.

(3) Re-classification of status of a promoter/ person belonging to promoter group to public

shall be permitted by the stock exchanges only upon satisfaction of the following
conditions:

(a)an application for re-classification to the stock exchanges has been made by the listed
entity consequent to the following procedures and not later than thirty days from
the date of approval by shareholders in general meeting:

(i)the promoter(s) seeking re-classification shall make a request for re-classification to

the listed entity which shall include rationale for seeking such re-classification and
how the conditions specified in clause (b) below are satisfied;

(ii)the board of directors of the listed entity shall analyze the request and place the
same before the shareholders in a general meeting for approval along with the views of
the board of directors on the request:

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 Provided that there shall be a time gap of at least three months but not exceeding
six months between the date of board meeting and the shareholder‟s meeting
considering the request of the promoter(s) seeking re-classification.

(iii)the request of the promoter(s) seeking re-classification shall be approved in the

general meeting by an ordinary resolution in which the promoter(s) seeking re-
classification and persons related to the promoter(s) seeking re-classification shall
not vote to approve such re-classification request.

(b)the promoter(s) seeking re-classification and persons related to the

promoter(s) seeking re-classification shall not:
(i)together, hold more than ten percent of the total voting rights in the listed entity;
(ii)exercise control over the affairs of the listed entity directly or indirectly;
(iii)have any special rights with respect to the listed entity through formal or
informal arrangements including through any shareholder agreements;
(iv)be represented on the board of directors (including not having a nominee
director) of the listed entity;
(v)act as a key managerial person in the listed entity;
(vi)be a „wilful defaulter‟ as per the Reserve Bank of India Guidelines;
(vii)be a fugitive economic offender.

(c)the listed entity shall:

(i)be compliant with the requirement for minimum public shareholding as required
under regulation 38 of these regulations;
(ii)not have trading in its shares suspended by the stock exchanges;
(iii)not have any outstanding dues to the Board, the stock exchanges or the
depositories.

(4) The promoter(s) seeking re-classification, subsequent to re-classification as public,

shall comply with the following conditions:
(a) he shall continue to comply with conditions mentioned at sub-clauses (i), (ii) and
(iii) of clause (b) of sub-regulation3 as specified above at all times from the date of such
re-classification failing which, he shall automatically be reclassified as promoter/
persons belonging to promoter group, as applicable;

(b) he shall comply with conditions mentioned at sub-clauses (iv) and (v)of clause (b)
of sub-regulation 3 for a period of not less than three years from the date of such re-
classification failing which, he shall automatically be reclassified as promoter/
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 persons belonging to promoter group, as applicable.

(5) If any public shareholder seeks to re-classify itself as promoter, it shall be required to
make an open offer in accordance with the provisions of Securities and Exchange
Board of India(Substantial Acquisition of Shares and Takeovers) Regulations, 2011.

(6) In case of transmission, succession, inheritance and gift of shares held by a

promoter/ person belonging to the promoter group:
(a)immediately on such event, the recipient of such shares shall be classified as a
promoter/ person belonging to the promoter group, as applicable.
(b)subsequently, in case the recipient classified as a promoter/person belonging to the
promoter group proposes to seek re-classification of status as public, it may do so
subject to compliance with conditions specified in sub-regulation (3) above.
(c)in case of death of a promoter/person belonging to the promoter group, such person
shall automatically cease to be included as a promoter/person belonging to the
promoter group.

(7) A listed entity shall be considered as „listed entity with no promoters‟ if due to re-
classification or otherwise, the entity does not have any promoter;

(8) The following events shall deemed to be material events and shall be disclosed by the
listed entity to the stock exchanges as soon as reasonably possible and not later than
twenty four hours from the occurrence of the event:
(a)receipt of request for re-classification by the listed entity from the
promoter(s) seeking re-classification;
(b)minutes of the board meeting considering such request which would include the views
of the board on the request;
(c)submission of application for re-classification of status as promoter/public by the listed
entity to the stock exchanges;
(d)decision of the stock exchanges on such application as communicated to the listed
entity;

(9) The provisions of sub-regulations 3, 4 and clauses (a)and (b)of sub-regulation 8 of this
regulation shall not apply, if re-classification of promoter(s)/ promoter group of the listed
entity is as per the resolution plan approved under section 31 of the Insolvency
Code, subject to the condition that such promoter(s) seeking re-classification shall
not remain in control of the listed entity;

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 Chapter VIIIA: OBLIGATIONS OF LISTED ENTITY WHICH HAS LISTED ITS
SECURITY RECEIPTS (Inserted w.e.f. 06.09.2018) (87A to 87E)
6. Regulation 87A APPLICABILITY
(1) The provisions of this chapter shall apply to the issuer of security receipts which has
listed its security receipts and the issuer and its sponsor shall ensure compliance
with each of the provisions of these Regulations.

7. Regulation 87B INTIMATIONS & DISCLOSURES OF EVENTS OR INFORMATION TO STOCK EXCHANGE:

(1) The listed entity shall first disclose to stock exchange(s) of all events or information, as
specified in Part E of Schedule III, as soon as reasonably possible but not later than
twenty four hours from occurrence of the event or information:

Provided that in case the disclosure is made after twenty four hours of occurrence of the
event or information, the listed entity shall, along with such disclosures provide
explanation for the delay.

(2) The listed entity with respect to disclosures referred to in this regulation, shall
provide updates related to such disclosures on a regular basis, till such
time the event is resolved/closed, with relevant explanations.

(3) The listed entity shall provide specific and adequate reply to all queries raised
by stock exchange(s) with respect to any events or information.
Provided that the stock exchange(s) shall disseminate information and clarification as
soon as reasonably practicable.

(4) The listed entity, suo moto, may confirm or deny any reported event or
information to stock exchange(s).

(5) The listed entity shall disclose on its website or on the website of the sponsor
all such events or information which has been disclosed to stock exchange(s)
under this regulation, and such disclosures shall be hosted on the website of the listed
entity for a minimum period of five years and thereafter as per the archival policy
of the listed entity, as disclosed on its website.

PART E: DISCLOSURE OF EVENTS OR INFORMATION TO STOCK EXCHANGES:

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 SECURITY RECEIPTS

The following events/information shall be disclosed by the listed entity without any
application of guidelines of materiality as soon as reasonably possible but not later than
twenty four hours from occurrence of event or information:

• periodic Net Asset Value;

• periodic rating obtained from credit rating agency or any revision in the
rating or any expected revision in rating;
• any proposal to change or change of credit rating agency or Valuer;
• any proposal for acquisition of assets including terms of acquisition;
• any proposal to change or any change in terms of security receipts including rights
or privileges or nature or form etc.;
• any breach of covenant(s) under the terms of security receipts;
• any change in the general character or nature of business / activities,
disruption of operation due to natural calamity etc. of the listed entity;
• any change in value of cash-flows as disclosed if any;
• any delay or expected delay in cash flows from the due date or pre-agreed date if
any;
• any receipt of cash flow or expected cash flow along with quantum so
received;
• any change in percentage holding of non-performing loans across other
banks;

8. Regulation 87C RATING, VALUATION & NAV DISCLOSURE:

(1) An issuer whose security receipts are listed on a stock exchange shall ensure that:
(i)the listed security receipts are valued at the end of each quarter i.e. as on March
31, June 30, September 30 and December 31 of every year;

(ii)valuation is conducted by an independent valuer; and

(iii)the net asset value is calculated on the basis of such independent valuation and the
same is declared by the asset reconstruction company within fifteen days of the
end of the quarter.

(2) The issuer shall also comply with the extant Reserve Bank of India
requirement of obtaining credit rating of security receipts at half yearly interval and
declaration of the net asset value thereafter and/or any other requirement as
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 prescribed by the Reserve Bank of India from time to time.
Provided that in those two quarters in a year, where both external valuation and credit
rating are required, issuer shall disclose lower of the two calculated Net Asset Value.
9. Regulation 87D TERMS OF SECURITY RECEIPTS:
(1) Any security receipt issued would be transferable only in favour of qualified buyers in
terms of Securitization and Reconstruction of Financial Assets and Enforcement of
Security Interest Act, 2002.

(2) Unless the terms of issue provide otherwise, the listed entity shall not select
any of its listed security receipts for payments otherwise than on pro rata basis
or by lot and shall promptly submit to the stock exchange(s) the details thereof.

10. Regulation 87E RECORD DATE:

(1) The listed entity shall fix a record date for payment to holders of security receipts or
for such other purposes as specified by the stock exchange(s).

(2) The listed entity shall give notice in advance of at least seven working days (excluding
the date of intimation and the record date) to the stock exchange(s) of the record
date or of as many days as the stock exchange may agree to or require specifying the
purpose of the record date;

11. Regulation 102 NA (2)For seeking relaxation under sub-regulation

Inserted (1), an application, giving details and the
grounds on which such relaxation has been
sought, shall be filed with the Board.

(3) The application referred to under sub-

regulation (2) shall be accompanied by a non-
refundable fee of rupees one lakh payable by
way of direct credit in the bank account
through NEFT/ RTGS/ IMPS or any other
mode allowed by Reserve Bank of India or by
way of a demand draft in favour of the Board
payable in Mumbai.
(Inserted w.e.f. 16.11.2018)

CREDIT RATING REGULATIONS, 1999

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 12. Regulation 9(f) A credit rating agency shall not carry a credit rating agency shall not carry out any
Substituted w.e.f out any activity other than the rating of activity other than the rating of securities
11.09.2018 securities offered by way of public or offered by way of public or rights issue.
rights issue.
Nothing contained in these regulations
Provided that nothing in these shall preclude a credit rating agency from
regulations shall prohibit a credit rating rating of financial instruments under the
agency from engaging in any other respective guidelines of a financial sector
activity in so far as it may be required by regulator or any authority as may be specified
a financial sector regulator as defined by the Board:
under section 3(18) of the Insolvency
and Bankruptcy Code, 2016. Provided that all other activities shall be
segregated to a separate entity within a
Provided further that if a credit period of two years from the date of
rating agency is carrying out notification of Securities and Exchange
activities other than the activity Board of India (Credit Rating
required by a financial sector Agencies)(Amendment) Regulations, 2018;
regulator, such activity shall be
segregated to a separate entity within
a period of two years from the
date of notification of Securities
and Exchange Board of India
(Credit Rating Agencies)(Amendment)
Regulations, 2018;

NON CONVERTIBLE REDEEMABLE PREFERENCE SHARES

13. Regulation 16B SECURITY DEPOSIT: Omitted
Omitted (1) The issuer shall deposit, before the
opening of subscription list, and keep
deposited with the stock exchange(s) an
amount calculated at the rate of one
per cent. of the amount of securities
offered for subscription to the public.

(2)The amount stipulated in sub-

regulation (1) shall be deposited in the
manner specified by Board and/or stock
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 exchange(s).

(3)The amount stipulated in sub-

regulation (1) shall be refundable or
forfeitable in the manner specified by
the Board
MUTUAL FUNDS
14. NORMS FOR (1) No sponsor of a mutual fund, its Proviso Added to Sub Regulation 3:
SHAREHOLDING associate or group company including
& the asset management company of the Provided that in the event of a merger,
GOVERNANCE fund, through the schemes of the acquisition, scheme of arrangement or any
IN MUTUAL mutual fund or otherwise, individually other arrangement involving the sponsors of
or collectively, directly or indirectly, have the mutual funds, shareholders of the
FUNDS
– asset management companies or trustee
(Regulation 7B)
(a)10% or more of the share-holding companies, their associates or group
or voting rights in the asset companies which results in the incidental
management company or the trustee acquisition of shares, voting rights or
company of any other mutual fund; or representation on the board of the asset
(b)representation on the board of the management companies or trustee companies,
asset management company or the this regulation shall be complied with within a
trustee company of any other mutual period of one year of coming into force of such
fund. an arrangement. (Inserted w.e.f. 06.12.2018)

(2)Any shareholder holding 10% or more

of the share-holding or voting rights in
the asset management company or
the trustee company of a mutual
fund, shall not have, directly or
indirectly, -
(a)10% or more of the share-holding
or voting rights in the asset
management company or the trustee
company of any other mutual fund; or
(b)representation on the board of the
asset management company or the
trustee company of any other mutual
fund.
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 (3) Any person not in conformity with
the sub-regulations (1) and (2) of this
regulation, as on the date of the coming
into force of this regulation shall comply
with sub-regulations (1) and (2) within
a period of one year from the date
of the coming into force of this
regulation.

DELISTING OF EQUITY SHARES

SEBI (DELISTING OF EQUITYSHARES) (SECOND AMENDMENT) REGULATIONS, 2018
14TH November 2018
15. Definition of “Public shareholders‟ means the holders „public shareholders‟ mean the holders of Scope narrowed.
Public of equity shares, other than the equity shares, other than the following:
Shareholders following: (a)promoters, promoter group and persons
(a) promoters; acting in concert with them;
(b) holders of depository receipts issued (b)acquirer(s) and persons acting in concert
overseas against equity shares held with with such acquirer(s); and
a custodian and such custodian. (c)holders of depository receipts issued
overseas against equity shares held with a
custodian and such custodian holding the
equity shares.

16. Report of Upon carrying out due-diligence as Upon carrying out due-diligence as
Merchant banker specified in terms of sub-regulation specified in terms of sub-regulation (1D) of
of Due Diligence (1D) of regulation 8, the merchant regulation 8, the merchant banker shall
[Regulation 8(1E)] banker shall submit a report to the submit a report to the board of directors
board of directors of the company of the company certifying the following:
certifying the following: (a) the trading carried out by any of the
(a) the trading carried out by the acquirer or promoter or promoter group
entities belonging to acquirer or entity or their related entities was
promoter or promoter group or their in compliance or not, with the applicable
related entities was in provisions of the securities laws; and
compliance or not, with the
applicable provisions of the securities (b) any of the acquirer or promoter or

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 laws; and
(b) entities belonging to acquirer or
promoter or promoter group or their
related entities have carried out or not,
any transaction to facilitate the success
of the delisting offer which is not in
compliance with the provisions of sub-
regulation (5) of regulation 4;
promoter group entity or persons acting in
concert or their related entities have
carried out or not any transaction to
facilitate the success of the delisting offer
which is in contravention of the provisions
of sub-regulation (5) of regulation 4;

17. Public The public announcement shall also The public announcement shall also specify a Time Reduced
Announcement specify a date, being a day not later date, being a day not later than One from 30 days to 1
(Regulation 10) than Thirty working days from the working day from the date of the day and
date of the public announcement, public announcement, which shall be the explanation added
which shall be the „specified date‟ for „specified date‟ for determining the names of
determining the names of shareholders shareholders to whom the letter of offer shall
to whom the letter of offer shall be sent. be sent.

Before making the public Before making the public announcement,

announcement, the acquirer or the acquirer or promoter shall appoint a
promoter shall appoint a merchant merchant banker registered with the Board
banker registered with the Board and and such other intermediaries as are
such other intermediaries as are considered necessary.
considered necessary.
Explanation. -The merchant banker
conducting due diligence on behalf of the
company may also act as the manager to
the delisting offer;

18. Escrow Account Sub Regulation 3: Sub Regulation 3: Explanation

(Regulation 11) The escrow account shall consist of The escrow account shall consist of either Added
either cash deposited with a scheduled cash deposited with a scheduled commercial
commercial bank, or a bank bank, or a bank guarantee in favour of the
guarantee in favour of the merchant merchant banker, or a combination of both.
banker, or a combination of both.
Explanation. -The cash component of the
escrow account may be maintained in an

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 interest bearing account, provided that the
merchant banker ensures that the funds
are available at the time of making
payment to shareholders.
19. Rights of 1. All public shareholders of the equity 1. All public shareholders of the equity shares Proviso Inserted
Shareholders to shares which are sought to be which are sought to be delisted shall be
participate in delisted shall be entitled to entitled to participate in the book building
Book Building participate in the book building process.
(Regulation 14) process.
2. Acquirer or promoter or a person acting in
2. Acquirer or promoter or a person a concert with any of the promoters shall
acting in a concert with any of the not make a bid in the offer.
promoters shall not make a bid in
the offer. 3. Any holder of depository receipts
issued on the basis of underlying
3. Any holder of depository receipts shares held by a custodian and any
issued on the basis of such custodian shall not be entitled to
underlying shares held by a participate in the offer:
custodian and any such custodian
shall not be entitled to participate in Provided that any holder of depository
the offer: receipts shall be allowed to participate in
the book building process under sub-
4. Nothing contained in sub- regulation (1) after exchanging such
regulation (3) shall affect the right depository receipts with the shares of the
of any holder of depository class that are proposed to be delisted;
receipts to participate in the book
building process under sub- 4. Sub Regulation 4 omitted.
regulation (1) if the holder of
depository receipts exchanges such
depository receipts with shares of the
class that are proposed to be
delisted.

20. Offer Price The offer price shall be determined The offer price shall be determined through Explanation
(Regulation 15) through book building process after book building process after fixation of floor inserted
fixation of floor price and disclosure of price and disclosure of the same in the public
the same in the public announcement announcement and the letter of offer.

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 and the letter of offer.
The floor price shall be determined in terms
The floor price shall be determined in of regulation 8 of Securities and Exchange
terms of regulation 8 of Securities and Board of India (Substantial Acquisition of
Exchange Board of India (Substantial Shares and Takeovers) Regulations, 2011,
Acquisition of Shares and Takeovers) as may be applicable.
Regulations, 2011, as may be
applicable. Explanation: The reference date for
computing the floor price would be the
date on which the recognized stock
exchange/s were required to be notified of
the board meeting in which the delisting
proposal would be considered;
21. Right of Promoter The Acquirer or promoter is not bound The Acquirer or promoter is not bound to Sub Regulation 1A
to either make a to accept the equity shares at the offer accept the equity shares at the offer price inserted
Counter offer or price determined by the book – building determined by the book – building process.
reject the offer process.
(Regulation 16) If the price discovered in terms of
If the acquirer or promoter decides not regulation 15 is not acceptable to the
to accept the offer price so determined: acquirer or the promoter, the acquirer or
(i) The acquirer or promoter shall release the promoter may make a counter offer to the
all shares to the holders within 10 public shareholders within two working days
working days of closure of the bidding; of the price discovered under regulation 15, in
(ii) The company shall not stop the final the manner specified by the Board from time
application for delisting; to time:
(iii) The acquirer or promoter may close Provided that the counter offer price shall
the escrow account. not be less than the book value of the
company as certified by the merchant banker;

If the acquirer or promoter decides not to

accept the offer price so determined:
(i) The acquirer or promoter shall release all
shares to the holders within 10 working days
of closure of the bidding;
(ii) The company shall not stop the final
application for delisting;
(iii) The acquirer or promoter may close the

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 escrow account.

22. Minimum Number An offer made under chapter III shall (1)If a Counter offer has not been made by the Explanation I &
of Shares to be be deemed to be successful only if,- acquirer or promoter in accordance with Sub Regulation 2
acquired (a) the post offer promoter regulation 16 (1A) above, An offer made inserted
(Regulation 17) shareholding (along with the persons under chapter III shall be deemed to be
acting in concert with the promoter) successful only if,-
taken together with the shares (a) the post offer promoter shareholding
accepted through eligible bids at the (along with the persons acting in concert
final price determined as per with the promoter) taken together with the
Schedule II, reaches ninety per cent. shares accepted through eligible bids at the
of the total issued shares of that class final price determined as per Schedule II,
excluding the shares which are held reaches ninety per cent. of the total issued
by a custodian and against which shares of that class excluding the shares
depository receipts have been issued which are held by a custodian and against
overseas; and which depository receipts have been issued
overseas; and
(b) at least twenty five per cent of
the public shareholders holding (b) at least twenty five per cent of the
shares in the demat mode as on date of public shareholders holding shares in the
the board meeting referred to in sub- demat mode as on date of the board meeting
regulation (1B) of regulation 8 had referred to in sub-regulation (1B) of
participated in the Book Building regulation 8 had participated in the Book
Process: Building Process:

Provided that requirement under Provided that requirement under clause (b)
clause (b) shall not be applicable to shall not be applicable to cases where the
cases where the acquirer and the acquirer and the merchant banker
merchant banker demonstrate to the demonstrate to the stock exchanges that
stock exchanges that they have delivered they have delivered the letter of offer to all the
the letter of offer to all the public public shareholders either through registered
shareholders either through registered post or speed post or courier or hand delivery
post or speed post or courier or hand with proof of delivery or through email as a
delivery with proof of delivery or through text or as an attachment to email or
email as a text or as an as a notification providing electronic link
attachment to email or as a or Uniform Resource Locator including a read
notification providing electronic link or receipt.

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 Uniform Resource Locator including a
read receipt. Explanation I.
a. If the acquirer or the merchant banker send
Explanation: the letters of offer to all the shareholders by
In case the delisting offer has been made registered post or speed post through India
in terms of regulation 5A of Post and is able to provide a detailed
Securities and Exchange Board of account regarding the status of delivery of
India (Substantial Acquisition of Shares the letters of offer (whether delivered or not)
and Takeovers) Regulations, 2011, the sent through India Post, the same would be
threshold limit of ninety per cent. for considered as a deemed compliance with
successful delisting offer shall be the proviso.
calculated taking into account the
post offer shareholding of the acquirer b. If the acquirer or the merchant banker
taken together with the existing is unable to deliver the letter of offer to
shareholding, shares to be acquired certain shareholders by modes other than
which attracted the obligation to make speed post or registered post of India Post,
an open offer and shares accepted efforts should be made to deliver the letters of
through eligible bids at the final offer to them by speed post or registered post
price determined as per Schedule II; through India Post. In that case, a detailed
account regarding the status of delivery of
letter of offer (whether delivered or not)
provided from India Post would also be
considered as deemed compliance with the
proviso;

Explanation II.
In case the delisting offer has been made in
terms of regulation 5A of Securities and
Exchange Board of India (Substantial
Acquisition of Shares and Takeovers)
Regulations, 2011, the threshold limit of
ninety per cent. for successful delisting
offer shall be calculated taking into account
the post offer shareholding of the acquirer
taken together with the existing
shareholding, shares to be acquired which
attracted the obligation to make an open offer
and shares accepted through eligible bids
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23. Procedure after Within five working days of the closure
Closure of Offer of the offer, the promoter/acquirer and
(Regulation 18) the merchant banker shall make a
public announcement in the same
newspapers in which the public
announcement under sub-regulation(1)
of regulation 10 was made regarding:-
(i) the success of the offer in terms of
regulation 17 Along with the final price
accepted by the acquirer; or
(ii) the failure of the offer in terms of
regulation 19; or
(iii) rejection under regulation 16 of the
final price discovered under Schedule II,
by the promoters;
FOREIGN PORTFOLIO INVESTORS
SEBI (FOREIGN PORTFOLIO INVESTORS) (THIRDAMENDMENT) REGULATIONS, 2018
W.E.F 31.12.2018
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at the final price determined as per
Schedule II;
(2) If a counter offer has been made by the
acquirer or promoter in accordance with
regulation 16(1A), an offer made under
chapter III shall be deemed to be
successful only if the post offer promoter
shareholding (along with the persons acting
in concert with the promoter) taken together
with the shares accepted at the counter offer
price reaches ninety per cent. of the total
issued shares of that class excluding the
shares which are held by a custodian and
against which depository receipts have been
issued overseas;
Within five working days of the closure of Clause iii deleted
the offer, the promoter/acquirer and the
merchant banker shall make a public
announcement in the same newspapers
in which the public announcement under
sub-regulation(1) of regulation 10 was made
regarding:-
(i) the success of the offer in terms of
regulation 17 Along with the final price
accepted by the acquirer; or
(ii) the failure of the offer in terms of regulation
19; or
(iii) rejection under regulation 16 of the final
price discovered under Schedule II, by the
promoters; (Deleted)
 24. Definition of NA “control” includes the right to appoint majority
Control & of the directors or to control the management
Investment or policy decisions exercisable by a person
Manager Inserted or persons acting individually or in
concert, directly or indirectly, including
by virtue of shareholding or management
rights or shareholders agreements or
voting agreements or in any other manner;

Investment Manager” means an entity

performing the role of investment
management, investment advisory or any
equivalent role, including trustees;
25. Eligibility Criteria An applicant desirous of foreign portfolio An applicant desirous of foreign portfolio Clause ea & eb
for Foreign investor registration should, inter alia, investor registration should, inter alia, satisfy inserted
Portfolio Investor satisfy the following conditions: the following conditions:
(FPI) (a) It should not be resident in India or a (l) It should not be resident in India or a Non-
Non-Resident Indian. Resident Indian.
(b) It should be a resident of a country:- (m) It should be a resident of a country:-
o whose securities market regulator o whose securities market regulator is a
is a signatory to IOSCO‟s signatory to IOSCO‟s Multilateral MOU
Multilateral MOU or a signatory to or a signatory to a bilateral MOU with
a bilateral MOU with SEBI; SEBI;
o Provided that an applicant o Provided that an applicant falling
falling under Category I under Category I foreign portfolio
foreign portfolio investor, as investor, as defined in clause (a)
defined in clause (a) of of Regulation 5, shall be
Regulation 5, shall be considered as eligible for
considered as eligible for registration, if the applicant is a
registration, if the applicant is resident in a country as may be
a resident in a country as may approved by the Government of
be approved by the India.
Government of India. (n) the applicant being a bank, is a resident of
(c) the applicant being a bank, is a a country whose central bank is a member
resident of a country whose central of Bank for International Settlements;
bank is a member of Bank for
International Settlements; (o) the applicant is not resident in a

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 country identified in the public
(d) the applicant is not resident in a statement of Financial Action Task Force
country identified in the public as:
statement of Financial Action Task (i)a jurisdiction having a strategic Anti-
Force as: Money Laundering or Combating the
(i)a jurisdiction having a strategic Financing of Terrorism deficiencies to
Anti-Money Laundering or which counter measures apply; or
Combating the Financing of
Terrorism deficiencies to which (ii) a jurisdiction that has not made
counter measures apply; or sufficient progress in addressing the
deficiencies or has not committed to an
(ii) a jurisdiction that has not action plan developed with the Financial
made sufficient progress in Action Task Force to address the
addressing the deficiencies or has deficiencies;
not committed to an action plan
developed with the Financial Action (p) the applicant is not a non-resident Indian;
Task Force to address the
deficiencies; (ea) where non-resident Indians or overseas
citizens of India or resident Indians are
(e) the applicant is not a non-resident constituents of the applicant or an existing
Indian; foreign portfolio investor –

(f) It should legally be permitted to (i)the contribution of a single non-resident

invest in securities outside the Indian or overseas citizen of India or
country of its incorporation or resident Indian shall be below twenty-five
establishment or place of business. percent. of the total contribution in the
corpus of the applicant or the existing foreign
(g) It should be authorized by its portfolio investor;
Memorandum of Association and
Articles of Association or equivalent (ii)the aggregate contribution of non-
document(s) or the agreement to resident Indians, overseas citizens of India
invest on its own behalf or on behalf and resident Indians shall be below fifty
of its clients. percent. of the total contribution in the
corpus of the applicant or the existing foreign
(h) the applicant has sufficient portfolio investor;
experience, good track record, is
professionally competent, financially Explanation: The contribution of Resident
sound and has a generally good Indian is permitted if made through the
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 reputation of fairness and integrity; Liberalized Remittance Scheme (LRS)
approved by Reserve Bank of India in
(i) the grant of certificate to the global funds whose Indian exposure is less
applicant is in the interest of the than 50%. (iii)the non-resident Indians,
development of the securities market; overseas citizens of India and resident
Indians shall not be in control of the
(j) It must be a fit and proper person as applicant or of the existing foreign portfolio
prescribed. investor: Nothing contained in sub-clause

(k) Any other criteria as specified by (iii) shall apply if the applicant or an
SEBI; existing foreign portfolio investor is an
„offshore fund‟ for which „No Objection
Provided that, in respect of a Certificate‟ has been issuedby the Board in
Category I or Category II foreign terms of the Securities and Exchange Board
portfolio investor, as defined in clause of India (Mutual Funds) Regulations,
(a) or clause (b) of Regulation 5, clauses 1996,or is controlled by an Investment
(f), (g) (h)and (i)of this regulation shall Manager which is controlled and/or owned
not be applicable. by non-resident Indian or overseas citizen
of India or resident Indian if the following
conditions are satisfied:

I. such Investment Manager is

appropriately regulated in its home
jurisdiction and registered with the Board
as a non-investing foreign portfolio
investor, or

II. such Investment Manager is incorporated

or setup under the Indian laws and
appropriately registered with the Board.
Nothing contained in clause (ea) shall
apply to non-investing foreign portfolio
investor or if the applicant or an existing
foreign portfolio investor proposes to invest or
invests only in units of schemes floated by
mutual funds in India.

(eb) the applicant and an existing

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 foreign portfolio investor and their
underlying investors contributing twenty-five
percent. or more in the corpus of the
applicant or existing foreign portfolio
investor or identified on the basis of control,
shall not be persons mentioned in the
Sanctions List notified from time to time by
the United Nations Security Council and
shall not be from a jurisdiction which is
identified in the public statement of the
Financial Action Task Force as:

(i)a jurisdiction having a strategic Anti-Money

Laundering or Combating the Financing of
Terrorism deficiencies to which counter
measures apply; or

(ii)a jurisdiction that has not made

sufficient progress in addressing the
deficiencies or has not committed to an
action plan developed with the Financial
Action Task Force to address the deficiencies.
(Inserted w.e.f 31.12.2018)

(q) It should legally be permitted to invest in

securities outside the country of its
incorporation or establishment or place of
business.

(r) It should be authorized by its

Memorandum of Association and Articles of
Association or equivalent document(s) or
the agreement to invest on its own behalf
or on behalf of its clients.

(s) the applicant has sufficient experience,

good track record, is professionally
competent, financially sound and has a
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 generally good reputation of fairness and
integrity;

(t) the grant of certificate to the applicant is in

the interest of the development of the
securities market;

(u) It must be a fit and proper person as

prescribed.

(v) Any other criteria as specified by SEBI;

Provided that, in respect of a Category I
or Category II foreign portfolio investor, as
defined in clause (a) or clause (b) of Regulation
5, clauses (f), (g) (h)and (i)of this regulation
shall not be applicable.

(1) Sub Regulation:

(1)An applicant or an existing foreign
portfolio investor shall comply with clause
(ea) of sub-regulation (1) within a period of
two years from the date of coming into
force of this regulation or from the date of
registration, whichever is later.

(2) An existing foreign portfolio investors

hall comply with clause (eb) of sub-
regulation (1) within a period of three months
from the date of coming into force of this
regulation.

(3) A foreign portfolio investor who remains

non-compliant even after the period
specified in clauses (1) and (2) of this sub-
regulation shall be prohibited from making
any fresh purchase of securities and such
foreign portfolio investor shall liquidate its
existing position in the Indian securities
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 market within a period of one hundred and
eighty days.

(4) In case of temporary breach of investment

limits specified in clause (ea) of sub-regulation
(1), the foreign portfolio investor shall
comply with the eligibility conditions within
ninety days of the breach and in case the
foreign portfolio investor remains non-
compliant with the said requirement even
after ninety days, then no fresh purchases
shall be permitted and such foreign portfolio
investor shall liquidate its existing position
in Indian securities market within a period
of the next one hundred and eighty days.

26. General In case the same set of ultimate
Obligation & beneficial owner(s) invest through
Responsibility of multiple entities, such entities shall be
FPI treated as part of same investor group
and the investment limits of all such
entities shall be clubbed at the
investment limit as applicable to a single
foreign portfolio investor.
Multiple entities having common ownership, Sub Regulation 3
directly or indirectly, of more than fifty Substituted
percent. or common control shall be treated as
being part of the same investor group and the
investment limits of all such entities shall be
clubbed at the investment limit as applicable
to a single foreign portfolio investor.
(3A) Notwithstanding anything contained in
sub-regulation (3), the clubbing of
investment limit of foreign portfolio investors
having common control shall not be applicable
where:
(i)the foreign portfolio investors are
appropriately regulated public retail funds; or

(ii)the foreign portfolio investors are public

retail funds majority owned by appropriately
regulated public retail fund on look through
basis; or

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 (iii)foreign portfolio investors are public retail
funds and Investment Managers of such
foreign portfolio investors are appropriately
regulated.

Explanation –
Public retail funds means –
(i)mutual funds or unit trusts which are open
for subscription to retail investors and which
do not have specific investor type requirements
like accredited investors;

(ii)insurance companies where segregated

portfolio with one to one correlation with a
single investor is not maintained;and

(iii)pension funds.

4) In order to appropriately monitor

investment concentration where common
ownership or control is identified for such
public retail funds, the Indian depositories
shall maintain details of controlling entities
on the basis of name, address, nationality,
passport number/ any other identification
card issued by Government and provide
appropriate reports to the Board on a
periodic basis.

27. Obligation & Explanation 1.-For the purposes of this
Responsibility of clause, "opaque structure" shall mean
Designated any structure such as protected cell
Depository company, segregated cell company or
Participant equivalent, where the details of the
ultimate beneficial owners are not
accessible or where the beneficial
Explanation 1.-For the purposes of this clause, Explanation 1 & 2
"opaque structure" shall mean any structure substituted
such as (i) protected cell company, segregated
cell company or equivalent, where the details
of the ultimate beneficial owners are not
accessible or where the beneficial owners are
ring fenced from each other or where the

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 owners are ring fenced from each other beneficial owners are ring fenced with regard
or where the beneficial owners are ring to enforcement, or (ii) where applicant or
fenced with regard to enforcement: its investor(s) identified on basis of threshold
for identification of beneficial owner have
Provided that the foreign portfolio issued any bearer shares or maintain any
investor satisfying the following outstanding bearer shares.
criteria shall not be treated as having
opaque structure: Provided that the foreign portfolio investor
(i)the applicant is regulated in its home satisfying the following criteria shall not be
jurisdiction treated as having opaque structure:
(ii)each fund or sub fund in the (i)the applicant is regulated in its home
applicant satisfies broad based criteria, jurisdiction;
and (ii)each fund or sub fund in the applicant
(iii)the applicant gives an undertaking satisfies broad based criteria;
to provide information regarding its (iii)the applicant gives an undertaking to
beneficial owners as and when Board provide information regarding its beneficial
seeks this information. owners as and when Board seeks this
information; and
Explanation 2.-For the purposes of (iv)the applicant submits an undertaking
Explanation 1, the definition of ultimate that it does not maintain any outstanding
beneficial owner shall be as provided bearer shares and it would not issue bearer
under the Master circular on Anti shares in future.
Money Laundering Standards or
Combating the Financing of Terrorism, Explanation 2. -The phrase “ultimate
issued by the Board from time to time beneficial owner” shall have the same meaning
assigned to the term “beneficial owner” as
defined under the Prevention of Money
Laundering Act, 2002

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