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Regulatory Alert: Scheme of Arrangement by listed entities – Clarification on submission of No Objection Certificate with stock exchange

06 January 2022

Securities and Exchange Board of India (SEBI) vide its circulars dated 16th November 2021 and 18th November 2021, amended certain provisions relating to the Schemes of Arrangement (Scheme) by listed entities, as laid down under SEBI Master Circular dated 22nd December 2020 which were immediately made applicable for all the schemes filed with the stock exchanges.

One of the amended provisions require listed entities to submit a No Objection Certificate (NOC) from the lending scheduled commercial banks/financial institutions/debenture trustees to the stock exchanges. SEBI, vide its latest circular dated 3rd January 2022, clarified that such NOC must be submitted before the receipt of the No-objection letter from stock exchange in terms of Regulation 37(1) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

BDO Comments

Corporate India is already grappling with significant delays on the culmination of merger process due to the pandemic. This new requirement is going to add to the timelines and delay the merger process even further.