SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, [last amended on March 6, ]. (Substantial Acquisition of Shares and Takeovers) Regulations, (2) These regulations shall come into force on the thirtieth day from the. October Takeover code. Referencer on SEBI ( Substantial. Acquisition of Shares and Takeovers). Regulations,

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Sebi Sast Regulations 2011 Pdf

Overview of SEBI Takeover Regulations, /10/ LOGO. Capital Market & Recent Developments – Recent Takeover Code, ICDR Regulations etc. 7. SEBI (SAST) REGULATIONS, – KEY. While, the SEBI (Substantial Acquisition of Shares and Takeovers) SAST Regulations, are available on SEBI's website under the.

India has in recent times been considered as one of the fastest growing economies in the world now. Concerning international regard, the view is that the country is a giant in today's emerging world. In the wake of India's most rapid growth, Mergers and Acquisition have become one of the most influential types of restructuring. These multiple initiatives are taken by SEBI to protect the interest of the shareholders. The Regulation was mainly added to regulate the acquisition of shares and voting rights in Public Listed Companies in India. The various changes made in the new regulations is traceable to the recommendations of a committee which was mainly set up to evaluate the many provisions mentioned in the rules. The regulation applies to direct or indirect acquisition of shares or voting rights or control over Target Company. As per the new Regulation Article2 1 a An Acquirer means any person who, directly or indirectly, acquires or agrees to download whether by himself or with persons acting in cohort with him, shares voting rights in control over a target company; Article 2 1 b "acquisition" means, directly or indirectly, agreeing to acquire or acquiring shares or voting rights in, or further control over, a target company; Article 2 1 e "control". What this includes is the right to appoint a majority of the directors or beyond this to control the management and policy outcomes exercisable by a person or in concert, provided that a director or officer of said target company shall not be considered in control over the target company, merely by holding such position.

But to compete at the world platform, the scale of business was needed to be increased. In this changed scenario, mergers and acquisitions were the best option available for the corporates considering the time factor involved in capturing the opportunities made available by the globalization. This new weapon in the armoury of corporates though proved to be beneficial but soon the predators with huge disposable wealth started exploiting this opportunity to the prejudice of retail investor.

This created a need for some regulation to protect the interest of investors so that the process of takeover and mergers is used to develop the securities market and not to sabotage it. In the year , with the enactment of SEBI Act, SEBI was established as regulatory body to promote the development of securities market and protect the interest of investors in securities market.

Further it got the power to make regulations for the above objectives. Bhagwati to study the effect of takeovers and mergers on securities market and suggest the provisions to regulate takeovers and mergers.

In its report, the committee stated the necessity of a Takeover Code on the following grounds: The confidence of retail investors in the capital market is a crucial factor for its development. Therefore, their interest needs to be protected.

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An exit opportunity shall be given to the investors if they do not want to continue with the new management. Full and truthful disclosure shall be made of all material information relating to the open offer so as to take an informed decision. The acquirer shall ensure the sufficiency of financial resources for the payment of acquisition price to the investors.

The process of acquisition and mergers shall be completed in a time bound manner. Disclosures shall be made of all material transactions at earliest opportunity.

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Thereafter, these regulations have been amended a number of times to address the changing circumstances and needs of corporate sector. Later in June , the Committee came out with the TRAC Report proposing some sweeping changes on critical issues, including the open offer trigger, offer size, indirect acquisitions, exemptions from open offer obligations, offer price calculations and competing offers which was then open for public comments.

The fundamental objectives of the Proposed Takeover Regulations were:- a. To provide a transparent legal framework for facilitating takeover activities; b. To protect the interests of investors in securities and the securities market, taking into account that both the acquirer and the other shareholders or investors and need a fair, equitable and transparent framework to protect their interests; c. To balance the conflicting objectives and interests of various stakeholders in the context of substantial acquisition of shares in, and takeovers of, listed companies.

To provide each shareholder an opportunity to exit his investment in the target company when a substantial acquisition of shares in or takeover of a target company takes place. To provide acquirers with a transparent legal framework to acquire shares in or control of the target company and to make an open offer; f. To ensure that the affairs of the target company are conducted in the ordinary course when a target company is subject matter of an open offer; g.

To ensure that fair and accurate disclosure of all material information is made by persons responsible for making them to various stakeholders to enable them to take informed decisions; h.

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To regulate and provide for fair and effective competition among acquirers desirous of taking over the same target company; and i. To ensure that only those acquirers who are capable of actually fulfilling their obligations under the Takeover Regulations make open offers.

After considering the public comments and further to discussion, the report has been modified to the present form i. The new Regulations shall come into force on the 30th day from the date of their publication in the Official Gazette i. Otherwise even the existing Promoters of these Companies have to give offer to consolidate their holding. The exemption from Open Offer available in case of change in control without acquisition of substantial shares, through a special resolution by postal ballot process, has been withdrawn and now the only route available for change in management and control is through the Open Offer to the shareholders of the Target Company.

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The New Regulations define the situations which will be deemed as Indirect Acquisition. Acquisition of shares by any person such that the individual shareholding of such person acquiring shares exceeds stipulated thresholds irrespective of whether there is a change in the aggregate shareholding with the PAC. Any revision in voluntary offer size made by the acquirer within 15 working days from the PA of the competing offer.

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