SEBI Removes 1% Mandatory Security Deposit Requirement for Public Issues. Banking & Finance | Dated: 29 Nov 2024 The Securities and Exchange Board of India (SEBI) issued a circular under Section 11(1) of the SEBI Act, 1992, which empowers SEBI to protect investor interests, regulate the securities market, and promote its development. 🎯 Key Highlights: - The circular abolished the earlier requirement mandating issuer companies to deposit 1% of the public issue size with stock exchanges before launching a public issue. This change was formalized through an amendment to Regulation 38(1) of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 (ICDR Regulations) on 17th May 2024. - As per the new regulations, SEBI has issued a significant update following an amendment to the ICDR (Issue of Capital and Disclosure Requirements) Regulations. The amendment resulted in the withdrawal of the previously outlined process for issuing a No Objection Certificate (NoC) for the release of the 1% security deposit for public issues. - Stock exchanges are now required to establish a joint Standard Operating Procedure (SOP) for the release of any 1% security deposits for processing pending refunds of deposits made under the previous framework. 💡 Other Important Facts: (i) SEBI has directed stock exchanges to notify all listed companies of the changes and publish the circular on their respective web portals. (ii) Additionally, the stock exchanges are required to amend bye-laws, rules, and regulations as necessary to align with the new framework. 📚 Test Your Knowledge: Recently, SEBI abolished which percentage of the mandatory security deposit in public issues? Correct Answer: 1% 🚀 Quick Recap: About SEBI Chairperson : Madhabi Puri Buch Headquarter : Mumbai