SEBI introduces Fast Track Issuance of Securities
In an effort to provide a faster and cost effective method of raising capital by listed companies, SEBI has decided on 24th August 2007 to introduce Fast Track Issuance of Securities (FTIs). This mode of issuance was recommended by the Primary Market Advisory Committee (PMAC) and will be available to listed companies who satisfy the following requirements:
· Listed on BSE or NSE, for at least three years
· Excellent track record in redressing Shareholders / Investor Grievances
· Average free float market capitalization of at least Rs.10,000 crore or more during last one year
. Compliant with the listing agreement
. Promoter group shares are necessarily held in dematerialized form
. Trading on the stock exchanges constitute at least 2% of total listed shares during the previous one year
· Impact of Auditors Qualifications in the audited accounts, if any, not to exceed 5% of the Net Profit / Net Loss after Tax
· No prosecution proceedings or show cause notice issued by SEBI is pending against the company / its promoters / whole time directors.
The listed companies meeting the requirements as stated above shall be eligible for rationalized disclosures as well as simplified procedural requirements as follows:
i) The Stock Exchanges shall give in principle approval based on the Board Resolution / Shareholders’ Resolution approving the raising of capital / making of the issue.
ii) The prospectus / letter of offer shall be prepared by the Lead Managers (LM) as per the provisions of the Companies Act and SEBI (DIP) Guidelines and same shall be filed with SEBI and Stock Exchanges for record purpose.
iii) LM may proceed with the issue after filing the offer document with SEBI and getting in principle approvals from Stock Exchanges, subject to waiting period, if any, as per the Companies Act requirements.
iv) LM shall ensure that any further material developments in the issue are promptly disseminated to the public at large by way of public notice.
Necessary amendments are being made to the SEBI DIP (Disclosure and Investor Protection) Guidelines. The new mode of issuance shall be available from the date of such amendment.
SEBI prescribes eligibility norms for fast track issues
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