SEBI streamlines disclosure mechanisms to record all encumbrances under takeover code
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- Last Updated on 9 March, 2022
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Circular No. SEBI/HO/CFD/DCR-3/P/CIR/2022/27, Dated, 07-03-2022
In order to streamline the capture and dissemination of information related to “encumbrances” and bring in more transparency, SEBI, in consultation with stock exchanges and depositories, has decided that all types of encumbrances as defined u/s 28 (3) of Takeover Regulations shall necessarily be recorded in the depository system. The depositories shall capture details of the ultimate lender along with the name of the trustee acting on behalf of such ultimate lender such as banks, NBFCs, etc. SEBI decided that the depositories shall now capture the reasons for encumbrances in the depository system.
SEBI has directed the depositories to devise an appropriate mechanism to record all types of outstanding encumbrances in the depository system by June 30, 2022.
For the purpose of dissemination of this information, the SEBI directed the depositories to provide information to the stock exchanges for the transactions recorded in the depository system. SEBI also directed the stock exchanges to consolidate the information received from both the depositories and disseminate the same on their website as per the formats specified by SEBI. The stock exchanges were also directed to devise an appropriate mechanism for dissemination of disclosures under System Driven Disclosures (‘SDD’) in a simple readable pdf format.
SEBI further clarified that Reconciliation of data shall be conducted by listed companies, stock exchanges, and depositories at least once in a quarter or immediately whenever any discrepancy is noticed. The provisions of the circular would come into effect from July 01, 2022.
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