SUPPLEMENT

PROFESSIONAL PROGRAMME
(NEW SYLLABUS)

for
June, 2025 Examinations
(Amendments covering June 01, 2024 to November 30, 2024)

STRATEGIC MANAGEMENT &

CORPORATE FINANCE

GROUP 2, PAPER 5

Disclaimer: This document has been prepared purely for academic

purposes only and it does not necessarily reflect the views of ICSI.
Any person wishing to act on the basis of this document should do so
only after cross checking with the original source.
1
Students appearing in Examination shall note the following:

Students appearing in June, 2025 Examination should also update themselves on all the relevant
Notifications, Circulars, Clarifications, Orders etc. issued by MCA, SEBI, RBI & Central
Government upto November 30, 2024.

The students are advised to acquaint themselves with the monthly and Regulatory updates
published by the Institute.

This supplement is to be read with the SMCF study material new Syllabus updated up to May,
2024.

2
 Index

S. No. Lesson Page

No.

1. Lesson 8- Raising of Funds from Equity and Procedural 4

Aspects- Public Funding

2. Lesson 9 - Real Estate Investment Trust and 6

Lesson 10- Infrastructure Investment Trust

3. Lesson 11- Raising of Funds – Private Funding 8

4. Lesson 13 – An overview of Listing and Issuance of 15

Securities in International Financial Services Centre

5. Lesson 14 - Raising of Funds from Debts and Procedural 20

Aspects

6. Lesson 17- Role of Intermediaries in Fund Raising 24

3
 LESSON 8
RAISING OF FUNDS FROM EQUITY AND PROCEDURAL ASPECTS- PUBLIC
FUNDING

(1) Enabling T+2 trading of Bonus shares where T is the record date (September 16, 2024)

As a part of the continuing endeavor to streamline the process of Bonus issue of equity shares,
SEBI has decided to reduce the time taken for credit of bonus shares and trading of such shares,
from the record date of the Bonus Issue under SEBI (ICDR) Regulations, 2018. The operational
procedure to implement T+2 trading of Bonus shares is given below:
• The issuer must apply for in-principle approval for the bonus issue under Regulation 28(1) of
SEBI (LODR) within 5 working days of the board approving the bonus.
• The Issuer while fixing and intimating the record date (T day) to the Stock Exchange as
required under Regulation 42(1) of SEBI (LODR) Regulations, 2015, for the proposed bonus
issue, shall also take on record deemed date of allotment on next working date of record date
(T+1 day). Once the stock exchange accepts the record date and requisite documents, it will
notify the market, including the deemed date of allotment (T+1).
• Upon receipt of intimation of the record date (T Day) and requisite documents from the Issuer,
the Stock Exchange(s) shall issue notification accepting the record date and notifying the
number of shares considered in the bonus issue. The notification shall include the deemed date
of allotment (T+1 day).
• By 12 PM on the T+1 day, issuers must ensure the required documents are submitted to
depositories for crediting the bonus shares.
• The issuer must upload the distinctive number ranges before the shares are credited.
• The newly allotted bonus shares will be available for trading on the T+2 day.
• Bonus shares will be directly credited to the existing ISIN without using a temporary ISIN.
This new process is mandatory for all bonus issues announced on or after October 1, 2024 .
For details: https://www.sebi.gov.in/web/?file=https://www.sebi.gov.in/sebi_data/attachdocs/sep-
2024/1726484230463.pdf#page=1&zoom=page-width,-15,842

(2) Usage of UPI by individual investors for making an application in public issue of securities
through intermediaries (September 24, 2024)

In order to streamline and align the process of applying in the public issue of debt securities, non-
convertible redeemable preference shares, municipal debt securities and securitized debt
instruments with that of public issue of equity shares and convertibles, SEBI has decided that all
individual investors applying in public issues of such securities through intermediaries (viz.
syndicate members, registered stock brokers, registrar to an issue and transfer agent and depository
participants), where the application amount is upto Rs. 5 Lakh, shall only use UPI for the purpose
of blocking of funds and provide his/ her bank account linked UPI ID in the bid-cum-application
form submitted with intermediaries. These provisions shall apply starting from November 01,
2024. Further, individual investors shall continue to have the choice of availing other modes (viz.
through SCSBs and Stock Exchange Platform) for making an application in the public issue.
For details: https://www.sebi.gov.in/web/?file=https://www.sebi.gov.in/sebi_data/attachdocs/sep-
2024/1727178794123.pdf#page=1&zoom=page-width,-15,781

4
(3) Trading supported by Blocked Amount in Secondary Market (November 11, 2024)
In a view to promote the UPI-based block mechanism in the secondary market, the SEBI directed
qualified stock brokers (QSBs) to offer either the facility of trading supported by block amount in
the cash segment or the 3-in-1 trading account facility to their clients.
Clients of the QSBs will have the option, to either continue with the existing facility of trading by
transferring funds to Trading Members or opt for either of the facilities stated above, as provided
by the QSBs. The provisions of this circular will come into effect from February 01, 2025.
For details: https://www.sebi.gov.in/legal/circulars/nov-2024/trading-supported-by-blocked-
amount-in-secondary-market_88339.html

*****

5
 LESSON 9 - REAL ESTATE INVESTMENT TRUST
AND
LESSON 10- INFRASTRUCTURE INVESTMENT TRUST

(1) Amendment to Master Circular for Real Estate Investment Trusts (REITs) and
Infrastructure Investment Trusts (InvITs) dated May 15, 2024 – Board nomination rights to
unitholders of REITs/InvITs (August 06, 2024)
SEBI vide these circulars has revised the board nomination rights to unitholders of REITs and
InvITs. As per the master circulars Eligible Unitholder(s)shall be entitled to nominate only one
Unitholder Nominee Director, subject to the unitholding of such Eligible Unitholder(s) exceeding
the specified threshold. If the right to nominate one or more directors on the Board of Directors of
the Manager is available to any entity (or to an associate of such entity) in the capacity of
shareholder of the Manager or lender to the Manager or the REIT (or its HoldCo(s) or SPVs), then
such entity in its capacity as unitholder, shall not be entitled to nominate or participate in the
nomination of a Unitholder Nominee Director. These circulars have relaxed the above restrictions
if the right to appoint a nominee director is available in terms of clause (e) of sub-regulation (1)
of regulation 15 of the SEBI (Debenture Trustees) Regulations, 1993
https://www.sebi.gov.in/legal/circulars/aug-2024/amendment-to-master-circular-for-real-
estateinvestment-trusts-reits-dated-may-15-2024-board-nomination-rights-to-unitholders-of-
reits_85493.html
https://www.sebi.gov.in/legal/circulars/aug-2024/amendment-to-master-circular-for-
infrastructure-investment-trusts-invits-dated-may-15-2024-board-nomination-rights-to-
unitholders-of-invits_85491.html

(2) Amendment to Master Circular for Real Estate Investment Trusts (REITs) and
Infrastructure Investment Trusts (InvITs) dated May 15, 2024 - Review of statement of
investor complaints and timeline for disclosure of statement of deviation(s) (August 22, 2024)
To improve ease of doing business related to activities of InvITs and REITs and to align with the
provisions of SEBI LODR Regulations, SEBI has amended its Master Circular for Real Estate
Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) dated May 15, 2024. It
is prescribed that the Trustee and the Board of Directors/Governing Body of the Manager shall
ensure that all investor complaints are redressed by the Manager in timely manner and statement
shall be placed, on a quarterly basis, before the Board of Directors/Governing Body of the
Manager and the Trustee for review. Further provided that statement of deviation shall also be
placed before the Trustee and the Board of Directors/Governing Body of the Manager for review.
Pursuant to such review, the statement shall be submitted to the stock exchange. Such submission
to the Stock Exchange shall be made along with the submission of financial results.
For details: https://www.sebi.gov.in/legal/circulars/aug-2024/amendment-to-master-circular-for-
infrastructure-investment-trusts-invits-dated-may-15-2024-review-of-statement-of-investor-
complaints-and-timeline-for-disclosure-of-statement-of-deviation-s-_86047.html
https://www.sebi.gov.in/legal/circulars/aug-2024/amendment-to-master-circular-for-real-estate-
investment-trusts-reits-dated-may-15-2024-review-of-statement-of-investor-complaints-and-
timeline-for-disclosure-of-statement-of-deviation-s-_86045.html

(3) (Real Estate Investment Trusts) (Third Amendment) Regulations, 2024 and (Infrastructure
Investment Trusts) (Third Amendment) Regulations, 2024 (September 27, 2024)
SEBI vide e-gazette notification dated September 27, 2024 brought out the amendments in SEBI
(Real Estate Investment Trusts) Regulations, 2014 and (Infrastructure Investment Trusts)
6
 Regulations, 2014. The amendments inter-alia include the reduction of the timeline for payment
distribution to unit holders, requiring it within five working days from the record date, instead of
fifteen. It also modifies voting provisions to calculate thresholds based on total votes cast rather
than votes against, facilitating smoother unit holder meetings. A provision mandates video
conferencing option for meetings and remote electronic voting. Additional regulations ensure that
adequate backup systems and data integrity measures are in place for electronically maintained
records. Overall, the amendments aim to enhance transparency, efficiency, and accessibility within
the REIT/InvIT framework, aligning with evolving market practices and stakeholder needs.

(4) Relaxation from certain provisions for units allotted to an employee benefit trust for the
purpose of a unit based employee benefit scheme, Alignment of timelines for making
distribution by REITs and Format of Quarterly Report and Compliance Certificate - Real
Estate Investment Trusts (REITs) [November 13, 2024]
SEBI vide these circulars relaxed specific lock-in and allotment requirements for units assigned
to employee benefit trusts under unit-based employee benefit (UBEB) schemes, promoting
operational ease for such trusts aligning with REIT/InvIT regulations.
Further, Indian REITs Association (“IRA”)/Bharat InvITs Association (“BIA”), in consultation
with SEBI, shall specify the format of quarterly report and compliance certificate required
to be submitted by the Manager of the REIT/ Investment Manager of the InvIT to the Trustee
under Regulation 10(18)(a) and Regulation 9(3) of the REIT /InvIT Regulations respectively, and
publish it on its website. Any future changes to this format shall be made by IRA/BIA in
consultation with SEBI, prior to implementation. Also, SEBI updated the timeline requirements
for distributions by REITs/InvITs, aligning them with recent amendments to REIT/InvIT
regulations. To address unclaimed distributions, any unpaid amounts will now be transferred to an
Escrow Account termed as the “Unpaid Distribution Account.”
These circulars shall be applicable from immediate effect.
For details: https://www.sebi.gov.in/legal/circulars/nov-2024/relaxation-from-certain-
provisions-for-units-allotted-to-an-employee-benefit-trust-for-the-purpose-of-a-unit-based-
employee-benefit-scheme-alignment-of-timelines-for-making-distribution-by-reits-and-
_88471.html
https://www.sebi.gov.in/legal/circulars/nov-2024/relaxation-from-certain-provisions-for-units-
allotted-to-an-employee-benefit-trust-for-the-purpose-of-a-unit-based-employee-benefit-scheme-
alignment-of-timelines-for-making-distribution-by-invits-and-_88472.html

7
 LESSON 11
RAISING OF FUNDS – PRIVATE FUNDING

(1) Information to be filed by schemes of AIFs availing dissolution period/additional liquidation

period and conditions for in-specie distribution of assets of AIFs (July 09, 2024)
SEBI vide this circular specified the Information to be filed by schemes of AIFs availing
dissolution period/additional liquidation period and conditions for in-specie distribution of assets
of AIFs.
A. Information Memorandum for schemes of AIFs entering into Dissolution Period–
The information memorandum for a scheme of an AIF entering into dissolution period shall be
submitted to SEBI (in terms of Regulation 29B(2) of SEBI AIF Regulations) before expiry of the
liquidation period or additional liquidation period of the scheme, as the case may be. SEBI has
also specified the format for information memoranda and due diligence certificate.
B. Information to be submitted by schemes of AIFs availing additional liquidation period –
In terms of regulation 29(9A) of AIF Regulations, if the liquidation period for a scheme of an AIF
has expired or is expiring within three months from the date of notification of the SEBI
(Alternative Investment Funds) (Second Amendment) Regulations, 2024 (i.e., on or before July
24,2024), such schemes may be granted an additional liquidation period, subject to conditions and
in the manner as may be specified by SEBI.
In this regard, Schemes of AIFs which are intending to avail the additional/fresh liquidation period
in terms of aforesaid provisions, shall submit information to SEBI regarding the same as per the
prescribed format given in the circular for grant of the additional liquidation period.
C. In specie distribution of investments of AIFs –
With respect to carry out in specie distribution of investments of a scheme of an AIF in terms of
Regulation 29(8) of AIF Regulations, it is clarified that such in specie distribution (other than the
aforesaid mandatory in specie distribution), shall be carried out after obtaining approval of at least
75% of the investors by value of their investment in the scheme of the AIF.
The manager, trustee and key management personnel of AIF and manager shall be responsible for
compliance with the provisions prescribed above.
For details: https://www.sebi.gov.in/legal/circulars/jul-2024/information-to-be-filed-by-schemes-
of-aifs-availing-dissolution-period-additional-liquidation-period-and-conditions-for-in-specie-
distribution-of-assets-of-aifs_84676.html

(2) Securities and Exchange Board of India (Alternative Investment Funds) (Third
Amendment) Regulations, 2024 (July 11, 2024)
Vide this notification a new category has been introduced called “migrated venture capital fund,
means a fund that was previously registered as a venture capital fund under the SEBI (Venture
Capital Funds) Regulations, 1996 and subsequently registered under these regulations as a sub-
category of Venture Capital Fund under Category I -Alternative Investment Fund.
The second proviso of Regulation 3(2) has been substituted which provides that ‘venture capital
funds may seek registration under these regulations as migrated venture capital funds in
terms of Chapter III-D, within twelve months from the date of this notification.

After second proviso, a new proviso is added as ‘Provided further that the Board may specify
enhanced regulatory reporting and other measures for the venture capital funds that do not seek
registration as a migrated venture capital fund in terms of Chapter III-D’
8
 Insertion of Chapter III -D
It provides applicability guidelines for the registration, operation, and reporting requirements for
these migrated funds. Key changes include new definitions, applicability, eligibility criteria,
private placement restrictions, and investment conditions. The regulations also address the
procedures for fund registration and the prohibition on public solicitations for subscriptions.
For details: https://www.sebi.gov.in/legal/regulations/jul-2024/securities-and-exchange-board-
of-india-alternative-investment-funds-third-amendment-regulations-2024_84929.html

(3) SEBI (Alternative Investment Funds) (Fourth Amendment) Regulations, 2024 (Notification
No. SEBI/LADNRO/GN/2024/198 dated August 05, 2024)
SEBI has notified the SEBI (Alternative Investment Funds) (Fourth Amendment) Regulations,
2024 which shall come into force on the date of their publication in the Official Gazette. Vide this
notification the following amendments have been made:
• Alternative Investment Funds to seek registration in Category II Alternative Investment Fund
which does not fall in Category I and III and which does not undertake leverage or borrowing
other than as permitted in these regulations. The words “to meet day to-day operational
requirements and” have been omitted. [Regulation 3(4)(b)]
• The first proviso to Regulation 13(5) has been amended to specify that a large value fund for
accredited investors may be permitted to extend its tenure for up to five years subject to the
approval of two-thirds of the unit holders by value of their investment in the large value fund
for accredited investors.
• The amendments have been carried out in regulation 16(1)(c) relating to investment
conditions for Category I Alternative Investment Funds and in regulation 17(c) relating to
investment conditions for Category II Alternative Investment Funds. It is provided that Category
I Alternative Investment Funds or Category II Alternative Investment Funds shall not borrow
funds or engage in any leverage for the purpose of making investments or otherwise, except for
borrowing funds to meet temporary funding requirements and day-to-day operational
requirements.
For details: https://www.sebi.gov.in/legal/regulations/aug-2024/securities-and-exchange-board-
of-india-alternative-investment-funds-fourth-amendment-regulations-2024_85550.html

(4) SEBI (Alternative Investment Funds) (Fourth Amendment) Regulations, 2024 (August 06,
2024)
SEBI vide this notification amended Regulation 13(5) of SEBI (Alternative Investment Funds)
Regulations, 2012 by permitting a large value fund for accredited investors to extend its tenure up
to five years subject to the approval of two-thirds of the unit holders by value of their investment
in the large value fund for accredited investors.
Earlier, permission could have been given for an extension of tenure beyond two years, subject to
the terms of the contribution agreement, other fund documents, and conditions by the Board.
However, the extension in tenure of any existing scheme of a large value fund for accredited
investors shall be subject to such conditions as may be specified by the SEBI from time to time.

Also, the investment conditions for Category I and II of Alternative Investment Funds as provided
in Regulation 16(1)(c) and Regulation 17 (c) have also been modified with ‘Category I Alternative
Investment Funds [Regulation 16(1)(c)]/ Category II Alternative Investment Funds [Regulation
17(c)]/ shall not borrow funds directly or indirectly or engage in any leverage for the purpose of
9
 making investments or otherwise, except for borrowing funds to meet temporary funding
requirements and day-to-day operational requirements for not more than 30 days, on not more than
four occasions in a year and not more than ten percent of the investable funds and subject to such
conditions as may be specified by the SEBI from time to time’. Earlier, the purpose was not
specified in the provision.
https://www.sebi.gov.in/legal/regulations/aug-2024/securities-and-exchange-board-of-india-
alternative-investment-funds-fourth-amendment-regulations-2024_85550.html

(5) Modalities for migration of Venture Capital Funds registered under erstwhile SEBI
(Venture Capital Funds) Regulations, 1996 to SEBI (Alternative Investment Funds)
Regulations, 2012 (August 19, 2024)
SEBI has issued the modalities for migration of Venture Capital Funds registered under erstwhile
SEBI (Venture Capital Funds) Regulations, 1996 to SEBI (Alternative Investment Funds)
Regulations, 2012 and stipulates that the application for seeking registration as a Migrated Venture
Capital Fund shall be made to SEBI and while applying to SEBI for migration to AIF Regulations
as “Migrated VCFs”, VCFs shall submit the original certificate of registration issued under VCF
Regulations and requisite information as per the format specified in Annexure I to the circular.
In terms of Regulation 19V(1) of AIF Regulations, “Migrated Venture Capital Fund” means a
fund that was previously registered as a Venture Capital Fund under the VCF Regulations and
subsequently registered under AIF Regulations as a sub-category of Venture Capital Fund under
Category I - Alternative Investment Fund. While opting for migration to AIF Regulations, VCFs
having only schemes whose liquidation period (in terms of Regulation 24(2) of VCF Regulations)
has not expired and shall be subject to the prescribed conditions.

For VCFs with schemes whose liquidation periods have not yet expired, the tenure of the schemes
will be determined based on the Private Placement Memorandum (PPM). If the PPM disclosed a
definite tenure, it remains unchanged post-migration. If the PPM did not specify a tenure, the
remaining tenure will be determined with the approval of 75% of investors by value.

Conditions for Schemes with Expired Liquidation Periods

For VCFs that have at least one scheme with an expired liquidation period, migration is allowed
only if there are no pending investor complaints regarding non-receipt of funds or securities. A
one-time additional liquidation period of one year is available for schemes with expired liquidation
periods, allowing them to wind up by July 19, 2025.

Post-Migration Provisions
Upon migration, the investors, investments, and units of the VCF or its schemes registered under
VCF Regulations will be deemed as those of the Migrated VCF under AIF Regulations.
Additionally, the applicability of the SEBI Master Circular for AIFs (dated May 7, 2024) and
subsequent circulars will extend to Migrated VCFs, as detailed in Annexure II of the notification.

Non-Migrating VCFs
For VCFs that choose not to migrate, Schemes with unexpired liquidation periods will be subject
to enhanced regulatory reporting. Schemes with expired liquidation periods will face appropriate
regulatory action if they continue operating beyond their original tenure. VCFs that have wound
up all their schemes or have made no investments must apply to SEBI to surrender their
registration by March 31, 2025. Failure to do so will result in the cancellation of their registrations.
https://www.sebi.gov.in/legal/circulars/aug-2024/modalities-for-migration-of-venture-
10
 capitalfunds-registered-under-erstwhile-sebi-venture-capital-funds-regulations-1996-to-sebi-
alternative-investmentfunds-regulations-2012_85914.html

(6) Guidelines for borrowing by Category I and Category II AIFs and maximum permissible
limit for extension of tenure by LVFs (August 19, 2024)
SEBI has issued Guidelines for borrowing by Category I and Category II AIFs and maximum
permissible limit for extension of tenure by LVFs. In order to facilitate ease of doing business and
provide operational flexibility, it has been decided to allow Category I and Category II AIFs to
borrow for the purpose of meeting temporary shortfall in amount called from investors for making
investments in investee companies (‘drawdown amount’).

Category I and Category II AIFs may borrow for the purpose of meeting shortfall in drawdown
amount, subject to the following additional conditions:

1. If AIF intends to borrow funds for meeting shortfall in draw down amount, the same shall
be disclosed in the PPM of the scheme.
2. Such borrowing shall be done only in case of emergency and as a last recourse, when the
investment opportunity is imminent to be closed and the drawdown amount from
investor(s)has not been received by the AIF before the date of investment, in spite of best
efforts by manager to obtain the drawdown amount from the delaying investor(s).
3. The amount borrowed shall not exceed twenty per cent of the investment proposed to be
made in the investee company, or ten per cent of the investable funds of the scheme of
AIF, or the commitment pending to be drawn down from investors other than the
investor(s) who has failed to provide the drawdown amount, whichever is lower.
4. The cost of such borrowing shall be charged only to investor(s) who failed to provide the
drawdown amount for making investments.
5. The flexibility of borrowing to meet shortfall in drawdown amount shall not be used as a
means to provide different drawdown timelines to investors.
6. The manager shall disclose the details with respect to amount borrowed, terms of
borrowing and repayment to all the investors of the AIF/scheme, on a periodic basis asper
the terms of agreement with the investors of the AIF.

Further, all Category I and Category II AIFs shall maintain thirty days cooling off period between
two periods of borrowing as permissible under AIF Regulations. The cooling off period of thirty
days shall be calculated from the date of repayment of previous borrowing.

With regard to Maximum permissible limit for extension of tenure by LVFs, Existing LVF
schemes who have not disclosed definite period of extension in their tenure in the PPM or
whose period of extension in tenure is beyond the permissible five years, shall align the period of
extension in tenure with the amended requirement within three months from the date of this
circular, i.e., on or before November 18, 2024.

Such LVF schemes shall update their revised period of extension in tenure in the quarterly report
submitted on the SEBI Intermediary Portal (SI Portal)for the quarter ending December 31, 2024.

While realigning the period of extension in tenure, LVF schemes shall have the flexibility to
revise their original tenure subject to the consent of all the investors of the scheme. Such LVF
schemes shall submit an undertaking to SEBI on or before November 18, 2024, stating that
consent of all the investors of the scheme has been obtained for revising the original tenure.
For details: https://www.sebi.gov.in/legal/circulars/aug-2024/guidelines-for-borrowing-by-
11
 category-i-and-category-ii-aifs-and-maximum-permissible-limit-for-extension-of-tenure-by-
lvfs_85909.html

(7) Modification in framework for valuation of investment portfolio of AIFs (September 19,
2024)
SEBI vide this circular has modified the framework for valuation of investment portfolio of AIFs
(Provided in Chapter 22 of Master Circular for AIFs dated May 07, 2024) as under:
• Valuation of securities, other than unlisted securities and listed securities which are non-traded
and thinly traded, for which valuation norms have been prescribed under SEBI (Mutual Funds)
Regulations, 1996 (‘MF Regulations’), shall be carried out as per the norms prescribed under
MF Regulations.
• Further, valuation of thinly-traded and non-traded securities will be harmonized across Sebi-
regulated entities by March 31, 2025.
• Changes in valuation methods to comply with these rules will not be considered "material
changes," but must be disclosed to investors.
• With regards to independent valuers, the framework for independent valuers of AIF portfolios
now requires that the registered valuer shall have the membership of ICAI, ICSI or ICMAI or
a CFA Charter.
Further, AIFs will now have seven months, as compared to six earlier, to report valuations based
on audited data from investee companies.
For details:
https://www.sebi.gov.in/web/?file=https://www.sebi.gov.in/sebi_data/attachdocs/sep-
2024/1726747283181.pdf#page=1&zoom=page-width,-16,800

(8) Specific due diligence of investors and investments of AIFs (October 08, 2024)
SEBI vide this circular, issued guidelines on the specific due diligence as per Regulation 20(20)
of SEBI (AIF) Regulations, 2012 requiring Alternative Investment Fund (“AIFs”), managers of
AIFs (“Managers”) and their Key Management Personnel (“KMPs”), to exercise specific due
diligence with respect to their investors and investments to prevent facilitation of circumvention
of such laws as may be specified by SEBI from time to time. It inter-alia prescribes the following:
1 Investors availing benefits designated for Qualified Institutional Buyers (“QIBs”)/
Qualified Buyers (“QBs”) through AIFs:
Applicability: For every scheme of AIFs which: (i) has an investor or investors belonging to the
same group; and (ii) such investor or investors contribute(s) 50% (fifty percent) or more to the
corpus of the scheme.
Compliance: Necessary due diligence as per the implementation standards formulated by
Standard Setting Forum for AIFs (“SFA”) shall be carried out prior to –
i. availing benefits available to QIBs under SEBI (Issue of Capital and Disclosure Requirements)
Regulations, 2018 and other regulations formulated by SEBI.
ii. making any investments in security receipts issued by asset reconstruction companies or
availing benefits designated for QBs under the Securitisation and Reconstruction of Financial
Assets and Enforcement of Security Interest Act, 2002.
2. RBI regulated lenders/ entities ever-greening their stressed loans/ assets through AIFs:

12
Applicability: For every scheme of an AIF:
i. whose manager or sponsor is an entity regulated by the Reserve Bank of India (“RBI”);
ii. that has investors regulated by RBI who: (a) individually or along with investors of the same
group contribute(s) 25% (twenty five percent) or more to the corpus of the scheme; or (b) is an
associate of the manager/sponsor of the AIF; or (c) by itself, or through its representative(s)/
nominee(s), has majority or veto power in voting over decisions of the investment committee set
up by the manager to approve investment decisions of the scheme.
Compliance:
i. Necessary due diligence as per the implementation standards formulated by SFA shall be carried
out.
ii. If an investor of the scheme is an AIF, or a fund set up outside India or in International Financial
Services Centres (IFSC) in India, then the criteria check for investor(s) regulated by RBI shall be
carried out on a look through basis.
iii. The manager shall ensure that the scheme does not make any investment that would lead to the
RBI regulated lender/entity acquiring or holding an interest/exposure in the investee company
indirectly (that is, through investment in a scheme of an AIF), that they are not permitted to acquire
or hold directly.
1. Consequences of failure to satisfy the due diligence checks specified by SFA:
Schemes falling under the ambit of the provisions discussed in paragraph A and B hereinabove,
shall proceed with proposed investment in accordance with the respective implementation
standards as formulated by SFA. If the proposed investment does not satisfy the due diligence
checks specified by SFA then:
a. either such investor or investors of same group as specified above, shall be excluded from the
investment, subject to necessary disclosure in the PPM for exclusion of investors; or
b. the investment shall not be made.
4. Applicability to existing investments held by the schemes as on the date of the Circular:
For schemes falling under the ambit of the provisions discussed in paragraph A and B hereinabove,
due diligence checks are also required to be carried out for existing investments as per the
implementation standards formulated by SFA. Basis the due-diligence checks for such existing
investments:
a. Any existing investment not satisfying the due diligence checks: details of such investment to be
reported to the custodian of the AIF, on or before April 7, 2025, in the format specified in
Annexure I of the Circular.
b. All existing investments satisfy the due diligence checks: the manager of the AIF shall submit
an undertaking to that effect to the custodian, on or before April 7, 2025.
c. Custodians shall compile the information reported in sub-paragraph (a) and (b) and furnish the
same to SEBI on or before May 7, 2025.
5. Investment from countries sharing land borders with India through AIFs:
a. Applicability: For every scheme of AIFs where 50% (fifty percent) or more of the corpus of the
scheme is contributed by investors –

13
i. who are citizens of/are from/are situated in a country which shares land border with India, or
ii. whose beneficial owners, as determined in terms of sub-rule (3) of Rule 9 of the Prevention of
Money-laundering (Maintenance of Records) Rules, 2005, are citizens of/are from/are situated in
a country which shares land border with India.
b. Compliance:
i. Necessary due diligence as per the implementation standards formulated by SFA, shall be carried
out prior to making any investment.
ii. Upon carrying out the necessary due diligence, such schemes shall report details of its
investment, which would result in the scheme holding 10% (ten percent) or more of equity/equity-
linked securities issued by an investee company (on a fully-diluted basis), to its custodian within
30 (thirty) days of investment, in the format as may be specified by SFA. Custodians shall compile
such information received from AIFs on a monthly basis and report to SEBI within 10 (ten)
working days from the end of the month.
For Such schemes shall also report to their custodians on or before April 07, 2025 in a format
specified by SFA, details of their existing investments where the scheme holds 10% (ten percent)
or more of equity/ equity-linked securities issued by an investee company (on a fully-diluted
basis). The custodians shall compile and share the information with SEBI on or before May 7,
2025.
For details: https://www.sebi.gov.in/web/?file=https://www.sebi.gov.in/sebi_data/attachdocs/oct-
2024/1728389873479.pdf#page=1&zoom=page-width,-15,850

14
 LESSON 13
AN OVERVIEW OF LISTING AND ISSUANCE OF SECURITIES IN
INTERNATIONAL FINANCIAL SERVICES CENTRE

(1) IFSCA (Listing) Regulations, 2024 (August 30, 2024)

The IFSCA (Listing) Regulations, 2024 (“New Listing Regulations”) providing a unified
regulatory framework for listing of securities and other permitted financial products. Highlights
of New Listing Regulations are as under:
Listing of Securities
(a) The IFSCA (Issuance and Listing of Securities) Regulations, 2024 enables the following type
of listing:
i. an initial public offer of specified securities by an unlisted entity;
ii. a follow-on public offer of specified securities by a Listed Entity;
iii. an initial public offer of specified securities by a Special Purpose Acquisition Company;
iv. a rights issue or a preferential issue or a qualified institutions placement of specified
securities by a Listed Entity;
v. issuance and listing of depository receipts by an entity;
vi. issue and listing of debt securities by an entity;
vii. secondary listing of securities by an entity;
viii. listing of Commercial Paper or Certificates of Deposit or other financial products as
permitted by the IFSCA.
(b) The following entities would be eligible for listing of securities on the recognised stock
exchanges in IFSC:
i. A company incorporated in an IFSC;
ii. A company incorporated in India; and
iii. A company incorporated in a foreign jurisdiction.

(c) Further, in respect of listing of debt securities, the following entities are also eligible to list on
the recognised stock exchanges in IFSC:
i. any supranational, multilateral or statutory institution.
ii. any municipality or any similar body
iii. An entity which offers or proposes to offer sovereign debt securities.

A. Listing of specified securities through IPO

The salient features for raising of capital through IPOs on a recognized stock exchange in IFSC
are as follows:
a) Eligibility
An issuer shall be eligible to make an initial public offer of specified securities, only if:
a) the issuer has an operating revenue, based on consolidated audited accounts, of at least USD
twenty million in the last financial year or averaged over the last three financial years;
b) the issuer has a pre-tax profit, based on consolidated audited accounts, of at least USD one
million in the last financial year or averaged over the last three financial years; or
c) The issuer has a post issue market capitalization of at least USD twenty five million; or
d) It qualifies under any other eligibility criteria specified by the IFSCA.

15
b) Filing of Offer Document
An Issuer is required to file offer document with IFSCA for observations. Issuers with issue size
of USD 50 million or less are exempted from filing offer document with IFSCA.

c) Offer Timing
The offer shall be made by the issuer within a period of not more than twelve months from the
date of issuance of observations by the Authority.

d) Offer Period
The initial public offer shall be kept open for at least one working day and not more than ten
working days.

e) Minimum Public Offer

2. Where the issuer is a company incorporated in India, including in an IFSC, such issuer shall
comply with the minimum offer and allotment to public and minimum public shareholding
norms prescribed under the Securities Contracts (Regulation) Rules, 1957.
3. Where the issuer is a company incorporated outside India, the minimum offer and allotment
to public shall be at least ten per cent. of the post issue capital and such issuer shall also
maintain the minimum public shareholding of ten per cent. of the post issue capital on a
continuous basis.

f) Minimum subscription
An offer shall be considered successful only if the minimum subscription as disclosed in the offer
document is received.

g) Lockup of securities
The pre-issue shareholding of promoters and controlling shareholders of the issuer shall be
locked-up for a period of 180 days from the date of allotment in the initial public offer.

B. Further Public Offer

A Listed Entity may make a follow-on public offer of specified securities in the manner provided
in IFSCA ( Issuance and Listing of Securities) Regulations, 2024.
C. Listing of SPAC
A SPAC is eligible to raise capital through initial public offer of specified securities on the
recognised stock exchange(s), only where:
a) The target business combination has not been identified prior to the IPO;
b) The SPAC has the provisions for redemption and liquidation in line with these Regulations;
and
c) The sponsor of the SPAC has a good track record in SPAC transactions, business
combinations, fund management or investment banking activities and the same shall be
disclosed in the offer document.
Here, sponsor shall mean a person sponsoring the formation of the SPAC and shall include
16
 persons holding any specified securities of the SPAC prior to the IPO.
The salient features of the framework for listing of SPACs are as follows:
Offer size: Not less than USD 50 million or any other amount as may be specified by the Authority
from time to time. Further, the sponsors shall hold at least 15% and not more than 20% of the post
issue paid up capital;
Minimum Application Size: The minimum application size in an initial public offer of SPAC
shall be USD 100,000. Allotment to investors shall be on proportionate basis or discretionary
basis, as disclosed in the offer document
SPAC Specific Obligations: Requirements have also been prescribed with respect to maintenance
of escrow account, eligible investments pending utlisation, acquisition timeline of 3 years, right
of diseenting shareholders, liquidation provisions etc.

D. Rights Issue or a Preferential Issue or a Qualified Institutions Placement

A Listed Entity may make rights issues, preferential issues or qualified institutions placement of
specified securities, subject to compliance with the requirements that may be specified by the
IFSCA.
E. Public Offer of Depository Receipts
An issuer incorporated outside an IFSC shall be eligible to make an issue of depository receipts
only if -
(i) It is authorised to issue depository receipts as per the applicable laws of its home jurisdiction;
(ii) The underlying securities represented by such depository receipts is in dematerialised form,
fully paid and free from all encumbrances.
The salient features of the framework for Public Offer of Depository Receipts are as under:
Offer size: Not less than USD 7,00,000 on or any other amount as may be specified by the
Authority from time to time.
Minimum Subscription: The listing of DRs shall be permitted only if the subscription in the
offer is not less than USD 700,000 or any other amount as may be specified by IFSCA.
Pricing: The price of the DRs can be determined through consultation with the lead managers(s)
through fixed price or through book building process.
Allotment: The allotment, payments and refunds must be completed within 5 working days from
the date of closure of the issue.
F. Listing of Debt Securities
An issuer may list its debt securities on a recognised stock exchange: The debt securities proposed
to be issued and listed on a recognised stock exchange may be offered on a standalone basis or
through a series of issuances (including medium term note programme).
The minimum subscription amount for an investor in case of private placement shall be disclosed
in the offer document.

In respect of a public issue of debt securities on a recognised stock exchange, the issuer shall
comply with requirements such as appointment of trustee, creation of debenture redemption
reserve and such other requirements as may be specified by the Authority or the recognised stock
exchange(s).
G. Secondary Listing of Specified Securities
Secondary Listing without public offer
An issuer, having its specified securities listed in a jurisdiction outside IFSC, may list those
specified securities on a recognised stock exchange(s), without making public offer, subject to the

17
following conditions:
(a) It shall file listing application, in the manner specified by the recognised stock exchange(s);
and
(b) It shall comply with the listing requirements of the recognised stock exchange(s) and such
other conditions as may be specified by the IFSCA.
Listing with public offer
1) An issuer, having its specified securities listed in a jurisdiction outside IFSC, may list the
specified securities on a recognised stock exchange(s) through a public offer.
2) The provisions relating to appointment of lead manager, in-principle approval from
recognised stock exchanges, filing of offer document, offer timing, disclosures in offer
document, reservations, pricing, offer period, minimum public offer, minimum
subscription, anchor investor, underwriting, monitoring agency, allotment, listing, post-
issue report, price stabilisation through green shoe option, lockup of securities, other
responsibilities of lead manager and prohibition on payment of incentives provided for
Initial Public Offers under PART A of Chapter III shall mutatis mutandis apply to listing
by way of public offer.
3) A public Indian company, with dual listing in IFSC and in India, shall comply with the
additional regulatory requirements as may be specified by the Authority.

H. Listing of Commercial Paper or Certificates of Deposit or other financial products

An issuer may list commercial paper, certificate of deposit and other financial product on a
recognised stock exchange in such manner and subject to such conditions as may be specified by
the IFSCA. Further, an issuer may list a fund or an investment trust on a recognised stock exchange
in terms of IFSCA (Fund Management) Regulations, 2022.
a) Commerical Paper
Depository: The issuer shall ensure that the CP listed on a recognised stock exchange
in the IFSC is in demat form and held with a recognised depository in the IFSC or an international
central securities depository.
Maturity: The issuer shall ensure that the maturity of the CP proposed to be listed on
a recognized stock exchange in the IFSC is not less than 7 days and not more than 1 year.
Other conditions:
a. CP shall be issued at a discount to face value.
b. The issuance of a CP with options (call/put) is not permitted.
c. The issuance of a CP is not permitted to be underwritten or co-accepted.
Listing Application
An issuer desirous of listing its CP on a recognised stock exchange shall file the listing application
along with a copy of offer document or information memorandum, as applicable, with the
recognised stock exchange in accordance with the requirements specified by the exchange.
The application shall be accompanied with regulatory fee of USD 1000. The regulatory fees
received by the stock exchange shall be remitted to the Authority.
b) Certificate of Deposits
Depository: The issuer shall ensure that the CD listed on a recognised stock exchange
in the IFSC is in demat form and held with a recognised depository in the IFSC or an
international central securities depository.
Listing Application
An issuer desirous of listing its CD on a recognised stock exchange shall file the listing
application along with a copy of the offer document or information memorandum, as
18
 applicable, with the recognised stock exchange in accordance with the requirements
specified by the exchange. The application shall be accompanied with regulatory fee of USD 1000.
The regulatory fees received by the stock exchange shall be remitted to the Authority
https://ifsca.gov.in/Viewer?Path=Document%2FLegal%2Fifsca-listing-regulations-
202430082024045210.pdf&Title=%20IFSCA%20%28Listing%29%20Regulations%2C%20202
4&Date=30%2F08%2F2024

(2) Listing of Debt Securities on the recognised stock exchanges in the IFSC (September 11,
2024)
The IFSCA (Listing) Regulations, 2024 (“Listing Regulations”) have been notified providing the
regulatory framework inter alia for listing of debt securities on the recognised stock exchanges in
the IFSC. In terms of regulation 72 of the Listing Regulations, an issuer is required to obtain credit
rating for its debt securities proposed to be listed on a recognised stock exchange from a credit
rating agency registered either with IFSCA or with a regulator in a Foreign Jurisdiction.
The market participants have represented that there are some transactions wherein the issuers are
already at an advanced stage of getting their debt securities listed on the recognised stock
exchanges and it may be difficult for such issuers to obtain credit rating in a short time frame.
In view of the above, after careful consideration of the representations received, it has been
decided that it shall be mandatory for issuers to obtain credit rating for the debt securities proposed
to be listed on the recognised stock exchanges with effect from October 01, 2024.
https://ifsca.gov.in/Viewer?Path=Document%2FLegal%2Flisting-of-debt-securities-on-the-
recognised-stock-exchanges-in-the-
ifsc11092024111414.pdf&Title=Listing%20of%20Debt%20Securities%20on%20the%20recogn
ised%20stock%20exchanges%20in%20the%20IFSC&Date=11%2F09%2F2024

(3) Listing of Commercial Paper and Certificates of Deposit on the recognised stock exchanges
in the IFSC (October 17, 2024)
IFSCA has notified the IFSCA (Listing) Regulations, 2024 in August 2024 providing the
regulatory framework for listing of securities and other permitted financial products on the
recognised stock exchanges in the IFSC. Regulations 80 and 81 of the Listing Regulations enable
listing of Commercial Paper (CP) and Certificates of Deposit (CD) respectively in such manner
and subject to such conditions as may be specified by IFSCA.
Accordingly, IFSCA has issued this circular on “Listing of Commercial Paper and Certificates of
Deposit on the recognised stock exchanges in the IFSC” to enable listing of new products on the
stock exchanges in the IFSC for providing an opportunity to the investors to invest in short term
instruments in the IFSC.
The Circular provides the regulatory requirements for facilitating issuers to list CP and CD in an
efficient and transparent manner ensuring that adequate material information is made available to
the investors for making informed decision. The Circular, inter-alia, specifies the conditions for
issuance of CP and CD, eligible issuers, eligible investors, disclosures in the offer document,
continuous disclosures etc.
https://ifsca.gov.in/Legal/Index?MId=-fAcdq-6O6w=

19
 LESSON 14
RAISING OF FUNDS FROM DEBTS AND PROCEDURAL ASPECTS

(1) Reduction in denomination of debt securities and non-convertible redeemable preference

shares (July 03, 2024)
SEBI vide circular dated July 03, 2024 modifies the relevant clauses of Chapter V (Denomination
of issuance and trading of Non-convertible Securities) of the Master Circular no.
SEBI/HO/DDHS/PoD1/P/CIR/2024/54 dated May 22, 2024, (‘Master Circular’) issued by SEBI
which prescribes provisions pertaining to denomination of issuance and trading of non-convertible
securities.
Market participants have expressed that lower ticket size of debt securities may encourage more
non-institutional investors to participate in the corporate bond market which in turn may also
enhance liquidity.
SEBI vide this circular has made the following changes:
1. This amendment inserts a provision allowing the issuance of debt securities or non-convertible
redeemable preference shares at a face value of Rs. 10,000 on a private placement basis,
subject to specific conditions that include the appointment of at least one Merchant Banker,
ensuring the security is interest/dividend bearing with fixed maturity, and allowing various
credit enhancements like guaranteed bonds, SBLC backed securities, and others.

2. The amendment permits several credit enhancements to make these securities more attractive
to investors. These include guaranteed bonds, partially guaranteed bonds, SBLC backed
securities, debt backed by pledges of shares or other assets, and more. Credit Rating Agencies
(CRAs) are tasked with verifying the documentation related to these enhancements to ensure
they are unconditional, irrevocable, legally enforceable, and that the support provider has a
lower probability of default compared to the issuer.

3. For issuers with valid shelf placement memoranda or General Information Documents (GID)
as of the effective date of the circular, funds can be raised through tranche placement
memoranda or Key Information Documents at a face value of Rs. 10,000, provided due
diligence is carried out by a Merchant Banker.

Deletion of Clauses:
The circular deletes clauses 2.1 and 2.2 of Chapter V of the Master Circular, which previously
mandated face values of Rs. 1 lakh and Rs. 1 crore for listed securities traded on stock exchanges
or OTC basis, respectively. Clause 2.3 is modified to state that the trading lot of listed debt
securities and non-convertible redeemable preference shares issued on a private placement basis
will always be equal to their face value.
For details: https://www.sebi.gov.in/legal/circulars/jul-2024/reduction-in-denomination-of-debt-
securities-and-non-convertible-redeemable-preference-shares_84573.html

(2) SEBI (Issue and Listing of Non-Convertible Securities) (Amendment) Regulations, 2024
(Notification No. SEBI/LAD-NRO/GN/2024/190 dated July 8, 2024)
SEBI has notified the SEBI (Issue and Listing of Non-Convertible Securities) (Amendment)

20
 Regulations, 2024 which shall come into force on the date of their publication in the Official
Gazette. Vide this Notification, the following amendments have been made in the SEBI (Issue and
Listing of Non-Convertible Securities) Regulations, 2021:
Regulation 23(7) has been inserted which states that the issuer shall fix a record date for the
purposes of payment of interest, dividend and payment of redemption or repayment amount or for
such other purposes as specified by the SEBI. Such record date shall be fixed at 15 days prior to
the due date of payment interest or dividend, repayment of principal or any other corporate actions.
Regulation 40 and 44 (3) has been substituted pertaining to ‘Due Diligence Certificate by
Debenture Trustee’. New provisions specify the formats to be used in cases of secured and
unsecured debt securities at the time of filing the draft offer document and at the time of filing of
the listing application by the issuer. Also, the formats for due diligence certificate which is to be
submitted by debenture to the stock exchange has been specified.
Schedule I of the Regulations has been amended by adding a provision that the issuers whose non-
convertible securities are listed on the date of filing of the offer document or placement
memorandum may provide a web link and a static QR code of the audited financial statements
subject to certain conditions.
Schedule IV has been amended which provides for the format of the due diligence certificate to
be given by the debenture trustee to be divided into two parts: Part A– provides the format in
which the Debenture Trustee has to give the Certificate of Due Diligence at the time of filing of
draft offer document and before opening of the issue. Part B- provides the format in which the
Debenture Trustee has to give the Certificate of Due Diligence at the time of filing of listing
application by issuer.
Also, Schedule IV-A has been inserted which provides for the format of the due diligence
certificate to be given by the debenture trustee: Part A: at the time of filing of draft offer document
and before opening of the issue. Part B: at the time of filing of listing applications by issuer.
For details: https://www.sebi.gov.in/legal/regulations/jul-2024/securities-and-exchange-board-of-
india-issue-and-listing-of-non-convertible-securities-amendment-regulations-2024_84775.html

(3) SEBI (Issue and Listing of Non-Convertible Securities) (Second Amendment) Regulations,
2024 (Notification No. SEBI/LADNRO/GN/2024/205 dated September 17, 2024)
SEBI has notified the SEBI (Issue and Listing of Non-Convertible Securities) (Second
Amendment) Regulations, 2024 which shall come into force on the date of their publication in the
Official Gazette. With a view to facilitate ease of doing business and provide flexibility to Issuers,
SEBI has amended the provisions of SEBI (Issue and Listing of Non-Convertible Securities)
Regulations, 2021 to streamline the public issue process for debt securities and Non-Convertible
Redeemable Preference share to provide:
• Reduction in the period for seeking public comments on the draft offer documents from 7
working days to 5 days.
• A proviso to Regulation 27 (2) has been inserted which states that the issuers whose specified
securities are listed on the recognized stock exchange and have nationwide trading terminals,
will post the draft offer document for 1 day immediately after the date of filing the draft offer
document with the stock exchange.
• A proviso to Regulation 30 (1) has been inserted providing flexibility to issuers by providing
discretion to issuers with regard to advertisement of public issue through electronic modes
subject to containing a QR Code and Link to complete advertisement in newspapers.

21
 • Regulation 33 A relating to “Period of Subscription” has been revised. The period for which
the public issue of debt of securities or non-convertible redeemable preference shares were
kept open for a minimum of 3 working days has now been reduced to 2 working days.
• Also, in case of a revision in the price band or yield, the issuer shall extend the bidding (issue)
period is closed in the offer document for a minimum period of one working day. Earlier It
was 3 working days.

(4) Reduction in the timeline for listing of debt securities and Non-convertible Redeemable
Preference Shares to T+3 working days from existing T+6 working days [September 26,
2024]
SEBI vide this circular has reduced the timeline for listing of debt securities and Non-convertible
Redeemable Preference Shares to T+3 working days from existing T + 6 working days (as an
option to issuers for a period of one year and on a permanent basis thereafter such that all listings
occur on a T+3 basis). Further, to ensure ease of compliance for issuers, the listing timeline of
T+3 working days is introduced as an option to issuers for a period of one year and on a permanent
basis thereafter such that all listings occur on a T+3 basis. Accordingly, during the period of
voluntary applicability of the listing timeline of T+3 working days, the provisions of regulation
37 (2) of NCS Regulations shall become applicable only afterT+6 working day, even in cases
where issuer has chosen T+3 as the listing timeline but fails to meet the same. The provisions of
this circular shall be applicable on voluntary basis to public issues of debt securities and NCRPS
opening on or after November 01,2024 and mandatory for public issues of debt securities and
NCRPS opening on or after November 01, 2025.
For details: https://www.sebi.gov.in/web/?file=https://www.sebi.gov.in/sebi_data/attachdocs/sep-
2024/1727346960726.pdf#page=1&zoom=page-width,-15,842

(5) Introduction of Liquidity Window facility for investors in debt securities through Stock
Exchange mechanism (October 16, 2024)
SEBI has introduced Liquidity Window facility for investors in debt securities through Stock
Exchange mechanism which allows investors holding listed debt securities to sell them back to
the issuer using a put option on specific dates, ensuring liquidity. It is felt that establishing a
framework of providing a Liquidity Window facility by the issuers through use of put options
exercisable on pre-specified dates or intervals will provide uniform norms for such issuer(s)to
consider adopting Liquidity Window facility in the manner specified. The provisions of this
circular shall be applicable on and from November 01, 2024
The circular inter-alia covers the following features and the conditions governing the Liquidity
Window facility:
Issuer Discretion and Prospective Applicability: The Liquidity Window can only be provided
at the discretion of the Issuer. Further, this option is only available for prospective issuances either
by way of public issue or private placement.
Eligible securities: All listed debt securities governed by the SEBI NCS Regulations are eligible
for the Liquidity Window Facility.
Prior approval of the board of directors of the issuer is required to provide the Liquidity
Window.
Stakeholders Relationship Committee (SRC): For entities which have listed their specified
securities, the implementation and outcome of the Liquidity Window shall be monitored by the
SRC. However, for entities which only have listed debt securities (for whom constitution of SRC
is not mandatory), the monitoring of the implementation and outcome of the Liquidity Window
22
shall be under the aegis of the board of directors, or such board-level committee as determined by
the board of directors.
Eligible Investors: The issuers have the option to specify the classes of investors for whom the
Liquidity Window shall be provided.
Minimum Holding Period: The Liquidity Window can only be offered to investors after the
expiry of one year from the date of issuance of the debt securities.
Period of Liquidity Window: The issuers offering the Liquidity Window shall keep it open for
a minimum of three working days. The Liquidity Window facility can be provided on a monthly
or quarterly basis, but the schedule of such facility shall be provided upfront in the offer documents
Reporting and Disclosure Requirements: After closure of a Liquidity Window, the issuer is
required to submit a report to the stock exchanges on which such debt securities are listed.
However, the form and manner of such disclosures are yet to be specified by the stock exchanges
in consultation with SEBI.
For details: https://www.sebi.gov.in/web/?file=https://www.sebi.gov.in/sebi_data/attachdocs/oct-
2024/1729080300145.pdf#page=1&zoom=page-width,-15,842

23
 LESSON 17
ROLE OF INTERMEDIARIES IN FUND RAISING

(1) SEBI (Research Analysts) (Second Amendment) Regulations, 2024 (Notification No.
SEBI/LAD-NRO/GN/ 2024/199 dated August 19, 2024)
SEBI has notified the SEBI (Research Analysts) (Second Amendment) Regulations, 2024 on
August 19, 2024, which shall come into force on the date of their publication in the Official
Gazette. Vide this notification, SEBI has inserted new regulation 15A prescribing the provisions
pertaining to fee and provides that the Research Analyst will be entitled to charge fees for
providing research services from a client including an accredited investor in the manner as
specified by SEBI.
For details: https://www.sebi.gov.in/legal/regulations/aug-2024/securities-and-exchange-board-
of-india-research-analysts-second-amendment-regulations-2024_86005.html

(2) Annual Compliance Certificate for Client Level Segregation by non-individual Investment
Advisers and Timeline for submission of periodic reports (October 25, 2024)
SEBI has already specified that a non-individual investment adviser (IA) shall maintain on record
an annual certificate from its statutory auditor confirming compliance with the client level
segregation requirements as specified in Regulation 22 of the IA Regulations. Now, it has been
decided to allow a non-individual IA to obtain annual compliance certificate from any auditor.
Further, SEBI has specified periodic reporting format for IAs. As a step towards ease of doing
business, it has been decided to grant a period of 30 days from the end of the half-yearly period
to make submission of periodic reports to Investment Adviser Administration and Supervisory
Body (IAASB).
For details: https://www.sebi.gov.in/legal/circulars/oct-2024/annual-compliance-certificate-for-
client-level-segregation-by-non-individual-investment-advisers-and-timeline-for-submission-of-
periodic-reports_87975.html

24