Mint explainer: Why Sebi rethinks on 1% security deposit on public/rights issues
SummaryThis move not only reduces the financial burden on issuers but also fosters an environment conducive to the ease of doing business.
Based on the recommendations of an expert committee, capital markets regulator Securities and Exchange Board of India’s recently sought public comments for removal of the 1% security deposit in public/rights issues that has been in vogue for several years. The move is aimed at encouraging more companies to access the primary markets for raising funds, helping in capital formation and ease of doing business under Sebi’s ICDR (Issue of Capital and Disclosure Requirements) Regulations. The last date for submitting comments was 9 February.