On 07-11-2022, the Securities and Exchange Board of India (SEBI) has issued a Master Circular on the issuance of a No Objection Certificate (NOC) for the release of 1% of the Issue Amount.

Key points:

  • Issuer, before the opening of the subscription list, is mandated to deposit with the designated stock exchange (DSE), 1% of the issue size available for subscription to the public. This amount of 1% shall be released to the issuer after obtaining the NOC from SEBI.

  • Issuer is required to submit an application on its letterhead addressed to SEBI for the purpose of obtaining the NOC from SEBI after the expiry of 2 months from the date of listing on the latest stock exchange which permitted listing.

  • Application for NOC shall be filed by the Post Issue Lead Merchant Banker (PILMB), provided that all issue-related complaints have been resolved by the PILMB/issuer, with the concerned designated office of SEBI under which the registered office of the issuer falls.

  • On the date of application for NOC, the bank guarantees, if any, which form part of the 1% deposit by the issuer shall have a residual validity of a minimum of 2 months.

  • Application for NOC shall be considered incomplete by SEBI if the application for NOC is not accompanied by a confirmation by PILMB that all the accounts in ASBA have been ‘unblocked’.

  • SEBI shall issue the NOC after satisfying itself that the complaints arising from the issue received on SEBI Complaint Redress System (SCORES) against the issuer have been resolved to its satisfaction; Issuer has been submitting Action Taken Reports on the complaints; Fees due to intermediaries associated with the issue process including ASBA Banks have been paid by the issuer.

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