SEBI issues Master Circular on the issuance of NOC for release of 1% of the issue amount

On 07-11-2022, the Securities and Exchange Board of India (SEBI) has issued a Master Circular on the issuance of a No Objection Certificate (NOC) for the release of 1% of the Issue Amount.
SEBI has reduced the time period to two months, from four months at present, to submit an application for obtaining a ‘No Objection Certificate’ for release of 1% of issue amount and also mandated that it shall be filed by PILMB with the confirmation that all accounts in ASBA have been unblocked.

Key Points:

• As per the provisions of regulation 38 (1) of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 (ICDR Regulations), the issuer, before the opening of the subscription list, is mandated to deposit with the designated stock exchange (DSE), 1% of the issue size available for subscription to the public. This amount of 1% shall be released to the issuer after obtaining the NOC from SEBI.
• For the purpose of obtaining the NOC from SEBI, issuer was earlier required to submit an application on its letterhead addressed to SEBI for the purpose of obtaining the NOC from SEBI after the expiry of 4 months from the date of listing on the latest stock exchange which permitted listing which has been reduced to 2 months.
• Application for NOC shall be filed by the Post Issue Lead Merchant Banker (PILMB), provided that all issue-related complaints have been resolved by the PILMB/issuer, with the concerned designated office of SEBI under which the registered office of the issuer falls.
• In addition to that application for NOC shall be considered incomplete by SEBI if the application for NOC is not accompanied by a confirmation by PILMB that all the accounts in ASBA have been ‘unblocked’.
• SEBI shall issue the NOC after satisfying itself that the complaints arising from the issue received on SEBI Complaint Redress System (SCORES) against the issuer have been resolved to its satisfaction.

Disha Gupta, Article Assistant – Audit, SW India

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