Sebi mulls new norms on rights

Sebi has proposed to reduce the current indicative timelines of a rights issue to T+20 working days from the date of the board meeting approving the rights issue till the date of closure of the rights issue

New Delhi: Markets regulator Sebi on Tuesday proposed to rationalise the disclosure requirements in the offer document and reduce the rights issue processing time to make it a preferred route of fundraising.

Additionally, the regulator has suggested enabling allotment to selective investors in rights issues, laying down adequate checks and balances and abolishing the requirement of appointing a merchant banker by an issuer for rights issues. In its consultation paper, the regulator has proposed mandating the appointment of a ‘monitoring agency’ to supervise the use of proceeds from all types of rights issues of equity shares. Currently, an issuer offering securities worth less than Rs 50 crore through a rights issue is not required to rope in a monitoring agency.