• IND SEBI updated on automation of disclosure requirements under SEBI (substantial acquisition of shares and takeovers) regulations, 2011- system-driven disclosures.

Encumbered Shares

• To streamline capture and dissemination of the information related to encumbrances and thus bring in more transparency, SEBI has consulted with the stock exchanges.
• It has decided that all types of encumbrances as defined under regulation 28(3) of takeover regulations shall necessarily be recorded in the depository system.
• The depositories shall capture details of the ultimate lender along with name of the trustee acting on behalf of such ultimate lender such as banks, NBFCs, etc.
• In case of issuance of debentures, name of the debenture issuer shall be captured.
• Depositories shall now capture reasons for encumbrances in the depository system.
• The depositories shall also devise an appropriate mechanism to record all types of outstanding encumbrances in the depository system by 30 June 2022.

Coordination among MIIs

• For purpose of dissemination of this information depositories shall provide information to the stock exchanges for the transactions recorded in the depository system.
• The stock exchanges shall consolidate the information received from both the depositories and disseminate the same on their website as per the formats specified.
• Must devise mechanism for dissemination of disclosures in simple readable pdf format.
• Reconciliation of data shall be conducted by listed companies, stock exchanges and depositories at least once in a quarter or immediately when noticing a discrepancy.

Effectiveness

• Provisions of this circular shall come into effect from 1 July 2022.