The Securities and Exchange Board of India (SEBI) through its amendments in December 2008 to the SEBI (Disclosure and Investor Protection) Guidelines, 2000, has permitted the introduction of certain financial instruments for companies to issue in order to raise capital from the public through qualified institutional placements (QIPs).
Apart from permitting the issue of these financial instruments, SEBI has also relaxed certain procedural requirements and introduced measures to provide for better transparency in the functioning of SEBI.
The recent amendments include:
(i) Extension of validity for an offer letter: With a view to providing relief to companies that have delayed their IPO/rights issue due to lack of investor confidence in the market, SEBI has extended the validity of the observation letter from three months (the current maximum) to one year, subject to the filing of an update document with SEBI if there are material changes.
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The legislative and regulatory update is compiled by Nishith Desai Associates, a Mumbaibased law firm that provides legal and tax counselling. The authors can be contacted at nishith@nishithdesai.com. Readers should not act on the basis of this information without seeking professional legal advice.
