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Sebi changes rules for rights issues

Sebi changes rules for rights issues
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First Published: Thu, Aug 20 2009. 09 33 PM IST
Updated: Thu, Aug 20 2009. 09 33 PM IST
Mumbai: Market regulator Securities and Exchange Board of India, or Sebi, on Thursday restricted companies from using funds raised in rights issues, or sale of additional stock to existing shareholders, until the share allotment was finalized. Until now, companies were able to use the funds once the stock exchange was convinced that 90% of the issue had been taken up.
Investors will also be allowed to use the banking channel to apply for shares in rights issues so that they don’t have to wait for refunds.
In a circular, Sebi said it had also reduced the time taken for finalizing the basis of allotment in rights issues to 15 days, from 42 days from the date of closure of the issue. Sebi also simplified the rights issue process by reducing disclosure requirements. Sebi said this was done to as part of its effort to make the process faster and cheaper.
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First Published: Thu, Aug 20 2009. 09 33 PM IST
More Topics: CNBC-TV18 | Sebi | Rights | Shares | Investors |