Background
With a view to streamline the process and reduce the time taken
for rights issues undertaken by listed companies, the Securities
and Exchange Board of India (SEBI) in its board meeting held on 20
November 2019, decided to amend the regulatory requirements
applicable to rights issues by listed companies. On 26 December
2019, SEBI notified amendments to the SEBI (Issue of Capital and
Disclosure Requirements) Regulations, 2018 (ICDR Regulations) and
the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015 (Listing Regulations) to facilitate the revision
of the rights issue process (Amendment).
One of the proposed changes in the Amendment is the introduction
of credit of Rights Entitlements (REs) in the demat account,
renunciation thereof and trading of REs. A detailed framework in
relation to the foregoing is yet to be notified by SEBI and/or the
stock exchanges.
