Mumbai: The Securities and Exchange Board of India (SEBI) has announced to further streamline the processing of draft schemes of arrangements filed by listed entities with stock exchanges.
In a circular, the regulator said that the concerned amendments are aimed at ensuring that the recognised stock exchanges refer draft schemes to SEBI only upon being fully convinced that the listed entity is in compliance with SEBI Act, rules, regulations and circulars issued thereunder.
“It has been decided to further streamline the processing of draft schemes filed with the stock exchanges, and make certain amendments to the aforesaid circular dated March 10, 2017,” the regulator said.
The circular shall be applicable for all the schemes filed with the stock exchanges after November 17, 2020.
SEBI directed the stock exchanges to bring the provisions of this circular to the notice of the listed companies and also to disseminate the same on their website.
Under the norms, exchanges need to forward their objection or no-objection letter to SEBI, which can also review the scheme.
Besides, the regulator said that valuation report is required to be placed before the audit committee of the listed entity.
The audit committee report can comment on the need for the merger, demerger, amalgamation or arrangement, rationale of the scheme, synergies of business of the entities involved in the scheme, impact of the scheme on the shareholders and cost benefit analysis of the scheme.