Takeover Code: SEBI raises trigger point to 25 percent

The Securities and Exchange Board of India (SEBI) has raised the ownership trigger for a mandatory open offer in a company to 25 percent from 15 percent now, chairman UK Sinha said on Thursday. The stock market regulator also raised the minimum size for an open offer to 26 percent from 20 percent now, Sinha said. [caption id=“attachment_50182” align=“alignleft” width=“380” caption=“The stock market regulator also raised the minimum size for an open offer to 26 percent from 20 percent. Screengrab/ibnlive.com”] [/caption] According to current regulations, if an entity buys more than 15 percent in another company, it has to make a mandatory open offer for a further 20 percent stake. SEBI has, however, abolished non-compete fees to be paid by acquirers in takeover deals. It has also gone ahead and asked merchant banks to disclose track record to IPO investors. It has also initiated a process to make IPO forms shorter and simpler. “The form will now carry track record of the merchant banker and pricing information. The new format will reduce size of IPO application,” Sinha said. Apart from the Takeover Code, the other matters that were discussed included the much talked-about know-your-customer (KYC) norms for all SEBI-regulated entities. The SEBI board has approved uniform KYC norms for all stock market transactions. “We will have uniform KYC norms for benefit of retail investors. The registration authority will be set up and this authority will share data with multiple agencies,” he said adding that the board has adopted Unique Identity Number Aadhar for KYC procedures of stock market investors. (With inputs from Reuters)