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Electronic book mechanism for issuance of securities on private placement basis

Electronic book mechanism for issuance of securities on private placement basis

With a view to further rationalise and ease the process of issuance of securities on 'Electronic Book Provider (EBP)' platform for private placement of securities, it has been decided to provide the following additional facilities on the EBP platform:

a) Closed bidding: In addition to the current system of open bidding, closed bidding shall also be permitted on EBP platform subject to the issuer disclosing the mode of bidding in the private placement memorandum/information memorandum. Under closed bidding, there shall be no real time dissemination of bids on the electronic book provider platform.

b) Multiple yield allotment: An issuer can choose either uniform yield or multiple yield allotment, provided the same is disclosed in the private placement memorandum/information memorandum.

c) Multiple bids by an investor: Investors can place multiple bids in an issue.

d) Allotment on yield-time priority basis: Allotment to the bidders shall be done on the basis of "Yield-time priority". Further, if two or more bids have the same yield and time, then allotment shall be done on "pro-rata" basis.

e) Pay-in of funds through escrow bank account of issuer: In addition to the current process of pay-in of funds through clearing corporation of stock exchanges, the pay-in of funds towards an issue on electronic book provider shall also be permitted through escrow bank account of an issuer.

f) Depositories to act as EBP: In addition to the Stock Exchanges, Depositories can also act as electronic book provider.

This is effective from October 01, 2018.

For more details about the update, please go through the attached SEBI Circular.

This alert may be relevant for the individuals with the following NISM Certifications:
• NISM Series II A: Registrars and Transfer Agents (Corporate) Certification Examination
• NISM Series II B: Registrars and Transfer Agents (Mutual Fund) Certification Examination
• NISM Series-III-A: Securities Intermediaries Compliance (Non-Fund) Certification Examination
• NISM Series VI: Depository Operations Certification Examination
• NISM Series-IX: Merchant Banking Certification Examination

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