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| PR No.73/2009 |
SEBI
Board Meeting
The SEBI Board meeting held in Mumbai today took the following
decisions:
(i) Listed
companies to declare dividend on per share basis only
It has been decided to amend the listing
agreement to provide that listed entities shall declare dividend on per-share
basis only. At present, there is no uniformity in declaring dividend. Some
companies declare dividend on per share basis and some as a percentage of face
value of the shares. Declaration of dividend as a percentage of face value has
the potential to mislead the investors in case face values of the shares of two
companies are different.
(ii) Timelines for bonus issues reduced
It has been decided to reduce the period for
completing a bonus issue to 15 days, where no shareholders’ approval is
required as per articles of association of the company and to 60 days where shareholders’
approval is required as per Articles of Association of the company. At present,
in terms of the DIP Guidelines, listed companies are required to complete a
bonus issue within a maximum period of six months from the date of approval of
the issue by the Board of the company.
(iii)
Time frame for announcing the price band for Initial Public Offering (IPO) shortened
It has been decided to amend the DIP
Guidelines to enable the issuer company making an IPO to declare the floor
price/ price band at least two working days before the date of opening of IPO
subject to wide dissemination of price band through newspaper advertisements, availability
in websites etc. The issue advertisements shall also disclose the financial
ratios calculated for both upper and lower end of the price band. At present,
in terms of the DIP Guidelines, in case of an IPO, either the floor price or
the price band is required to be disclosed in the Red Herring Prospectus (RHP)
i.e. about two weeks before the date of opening of the IPO.
(iv)
Review of preferential allotment guidelines
for warrants :
It has been decided to amend the DIP
Guidelines to increase the upfront margin to be paid by allottees of warrants
to 25%. At present, in terms of DIP Guidelines, the allottees of warrants are
required to pay a margin of 10% as upfront payment at the time of allotment.
(v) Relaxation
of pricing norms - Satyam Computer Services Ltd.(Satyam)
The SEBI Board examined the request of
Satyam Computers Services Limited for exemption from certain provisions of SEBI
(Substantial Acquisition of Shares and Takeovers) Regulations 1997.
The Board recognized the special
circumstances that have arisen in the affairs of the company and concluded that
the issue needs to be dealt with in the general context. Accordingly it was decided to appropriately
amend the regulations / guidelines to enable a transparent process for arriving
at the price for such acquisition.
The above measures will be effective from
the date of amendment to the
Regulations / DIP Guidelines / Listing Agreement.
(vi)
Investor Protection and Education Fund (IPEF):
The Board approved regulations for
governance of IPEF. The fund may be
credited by:
i)
contribution as
may be made by the Board to the Fund.
ii)
Grants
and donations given to the Fund by the
Central Government, State Government or any other entity approved by Board for
this purpose;
iii)
Proceeds
of foreclosures of deposit/invocation of bank guarantee/sale of the securities
kept in the escrow accounts by an acquirer in case of non fulfillment of its
obligations under the Securities and Exchange Board of India (SAST)
Regulations, 1997.
vi.(a) The
Fund shall be used for investor protection and promotion of investor awareness and education.
The Fund would be utilized for the following purposes in particular:-
i)
Educational
activities– seminars, training, research and publications – aimed at investors;
ii)
Awareness programmes through media – print, electronic
or otherwise – aimed at investors;
iii)
Funding
investor education and awareness activities of Investors’ Associations
recognized by SEBI;
iv)
Aiding SEBI recognized investor associations
to undertake legal proceedings in the interest of investors in securities that
are listed or proposed to be listed;
Mumbai