Disclosure of encumbered shares.
(2) The promoter of every target company shall disclose details of any invocation of such encumbrance or release of such encumbrance of shares in such form as may be specified.
(3) The disclosures required under sub-regulation (1) and sub-regulation (2) shall be made within seven working days from the creation or invocation or release of encumbrance, as the case may be to,—
a. every stock exchange where the shares of the target company are listed; and
b. the target company at its registered office.
The promoter of every target company shall declare on a yearly basis that he, along with persons acting in concert, has not made any encumbrance, directly or indirectly, other than those already disclosed during the financial year.
(a) every stock exchange where the shares of the target company are listed; and
(b) the audit committee of the target company.
Exemption from enforcement of the regulations in special cases.
(1) The Board may, exempt any person or class of persons from the operation of all or any of the provisions of these regulations for a period as may be specified but not exceeding twelve months, for furthering innovation in technological aspects relating to testing new products, processes, services, business models, etc. in live environment of regulatory sandbox in the securities markets.
(2) Any exemption granted by the Board under sub-regulation (1) shall be subject to the applicant satisfying such conditions as may be specified by the Board including conditions to be complied with on a continuous basis.
Explanation. For the purposes of these regulations, “regulatory sandbox” means a live testing environment where new products, processes, services, business models, etc. may be deployed on a limited set of eligible customers for a specified period of time, for furthering innovation in the securities market, subject to such conditions as may be specified by the Board.
- Refer NSE Guidance note on reason for Encumbrance dated 27.09.2019 . To view the Guidance Note. Click Here.
- NSE has directed all the companies to intimate their promoters to comply with the SEBI (Substantial Acquisition of shares and takeovers) Regulation, 2011 and SEBI Circular dated August 05, 2015 for any filing made by the Promoters vide its Circular dated 18.02.2019 . To view the Circular, Click Here.
- SEBI directs that the Promoters of every listed company should specifically disclose detailed reasons for encumbrance if the combined encumbrance by the promoter along with PACs with him equals or exceeds:
a) 50% of their shareholding in the company; or
b) 20% of the total share capital of the company vide its Circular dated 07.08.2019 w.e.f., 01.10.2019. To view the Circular, Click Here.
SEBI (Regulatory Sandbox) (Amendment) Regulations, 2020 dated 17.04.2020
SEBI (SAST) (Second Amendment) Regulations, 2019 dated 29.07.2019
Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) (Second Amendment) Regulations, 2021 dated 13.08.2021
Circular dated 27.03.2020 on relaxation from compliance with certain provisions of the SEBI (SAST) Regulations, 2011 due to the COVID-19 pandemic.
Circular on disclosure of reasons for encumbrance by promoter of listed companies dated 07.08.2019 w.e.f., 01.10.2019
NSE Circular relating to deficiencies in disclosures related to Pledge of Shares dated 18.02.2019
NSE Guidance note on reason for Encumbrance dated 27.09.2019