TMI BlogReview of provisions pertaining to Electronic Book Provider platformX X X X Extracts X X X X X X X X Extracts X X X X ..... ar stipulates the issuances which have to necessarily be made through EBP, the eligible participants, obligations/ responsibilities of various entities, provision to issuer to withdraw offer, process of bidding and allotment, etc. 2. SEBI has received representations from various market participants, requesting for review of the provisions pertaining to EBP platform, in order to address the issues of fastest finger first (viz. allotment based on time priority in bidding for issuances with fixed parameters), certain bidders not getting allocations despite having worked on the issuance pre-listing, high ratio of green shoe to base issue size, limits on arrangers placing bids on behalf of clients, etc. 3. The said issues were discussed with market participants including issuers, arrangers, investors (e.g. banks, mutual funds), stock exchanges, depositories, and also at the Corporate Bonds and Securitization Advisory Committee (CoBoSAC) meetings. It was observed that in order to address the concern of fastest finger first , it is essential to modify the book building process to ensure allocations based on the best bid rather than the bidder with the best technology for placi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd NCRPS as per the provisions of SEBI NCS Regulations, 2021, if it is: 2.1.1. a single issue, inclusive of green shoe option, if any, of Rs. 50 crore or more; 2.1.2. a shelf issue, consisting of multiple tranches, which cumulatively amounts to Rs. 50 crore or more, in a financial year; and 2.1.3. a subsequent issue, where aggregate of all previous issues by an issuer in a financial year equals or exceeds Rs. 50 crore. 2.2. Issues of debt securities and NCRPS on private placement basis, irrespective of issue size, by issuers who are in existence for less than three years, in accordance with Clause 2.3.8 c. of Schedule II to the SEBI NCS Regulations, 2021. 2.3. The issuance of PDIs, PNCPS, PCPS, RNCPS, and instruments of similar nature which are essentially non-equity regulatory instruments, forming part of a bank s or NBFC s capital, issued as per RBI stipulations and listed under Chapter V of the SEBI NCS Regulations, 2021, irrespective of the issue size. 3. An issuer, if desirous, may choose to access EBP platform for private placement of municipal debt securities or CPs or CDs also. 4. Issuers of debt securities and NCRPS on private placement basis of issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in Rs. crore 6 . Participants: 6.1. Participants, prior to entering into the bidding process shall be required to enroll with EBP. Such enrollment of a participant on an EBP will be onetime exercise and shall be valid till the time such enrolment is annulled or rescinded. 6.2. The KYC verification and enrolment of the eligible participants on the EBP platform shall be done in the following manner: 6.2.1. KYC verification shall be undertaken by obtaining/ utilizing existing KYCs of clients from KYC Registration Agencies (KRAs) registered with SEBI or on the basis of the guidelines as prescribed by SEBI from time to time. 6.2.2. For QIB investors bidding directly or through arranger(s), KYCs and enrolment shall be done by the EBP. 6.2.3. For non-QIB investors bidding directly, KYCs shall be done by the issuer and enrolment shall be done by the EBP. 6.2.4. For non-QIB investors, which are bidding through arranger(s), KYC and enrolment on EBP shall be ensured by arranger(s). 6.3. EBPs shall ensure that all eligible participants have access to the Placement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nouncement on EBP at least one working day before initiating the bidding process. 7.2.2. Bidding announcement shall be accompanied with details of bid opening and closing time, and any other details as required by the EBP from time to time. 7.2.3. Any change in bidding time and/ or date by the issuer shall be intimated to the EBP, ensuring that such announcement is made within the operating hours of the EBP, at least a day before the bidding date. Provided that such changes in bidding date or time shall be allowed for a maximum of two times. 7.3. The bidding process on EBP platform shall be on an anonymous order driven system. 7.4. Bid shall be made by way of entering bid in: 7.4.1. Price; or 7.4.2. Coupon (in %), up to four decimal places; or 7.4.3. Spread in basis points (bps). Further, the bid amount shall be specified in Rupees (INR). 7.5. Bidding process shall be based on the following: 7.5.1. Coupon specified by issuer: The face value and coupon remaining constant, bids/ quotes shall be placed by the bidders in terms of price. 7.5.2. Coupon/ spread discovered during bidding: The face value remaining constant, bids/ quotes shall be placed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... coupon/ spread quoted by each bidder/ allottee in the bidding process. 7.11.3. If two or more bids have the same coupon/ price/ spread and time, then allotment shall be done on pro-rata basis. 8. Anchor portion within the base issue size: 8.1. Issuer shall have an option to avail an anchor portion within the base issue size, subject to the below mentioned conditions: 8.1.1. Issuer shall have the discretion to select the anchor investor(s) for the anchor portion. 8.1.2. The quantum of allocation(s) to the anchor investor(s) shall be at the discretion of the issuer, subject to total allocation to the anchor(s) not exceeding 30% of the base issue size. 8.1.3. There shall be no bidding for anchor portion on the EBP platform. 8.1.4. If the issuer opts for anchor portion, the same shall be suitably disclosed in the placement memorandum and the term sheet, along with the relevant quantum (maximum 30%). 8.1.5. Issuer shall disclose details of the anchor investor(s) and the corresponding quantum allocated, to the EBP, along with the Placement Memorandum and the term sheet. 8.1.6. The settlement amount for the anchor investor(s) shall be determined on the ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of stock exchanges, as per their operating guidelines, or through an escrow bank account of the issuer, as mentioned below. Provided that where the issuer has selected the escrow bank account as the mechanism for pay-in, EBP, pursuant to successful closure of issue, shall share the allocation details with the Registrar to an Issue, associated with the issue. 9.6. Process flow of settlement, where funds pay-in is to be made to escrow bank account of issuer: 9.6.1. Successful bidders, in an issue, will make pay-in of funds towards the allocation made to them, in the escrow bank account within the timelines, as provided by the issuer in the PM/ IM. The funds pay-in by the successful bidders will be made only from the bank account(s), which have been provided/ updated in the EBP system. Further, pay-in received from any other bank account will lead to cancellation of bid and consequent debarment of the investor from accessing EBP platform for 30 days. 9.6.2. Escrow bank, pursuant to receipt of funds will provide a confirmation to the RTA, associated with the issue, about receipt of funds along with details including name of bank account holder, bank account number and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he timelines by which such pay-in shall be done by the successful bidders; and 11.1.3. effect corporate action for credit of securities to the successful bidders, after receiving confirmation from the RTA about receipt of funds. 11.2. RTA shall: 11.2.1. undertake reconciliation between information received from the escrow Bank and EBP. Further, after reconciliation, shall intimate the issuer about the receipt of funds and shortfall, if any, and the reasons thereof; 11.2.2. issue instructions to the escrow bank account for the release of funds, after passing on the instructions for corporate action to the depositories; and 11.2.3. intimate to the EBP, upon closure of the issue, the status of the issue i.e. successful or withdrawn, details of defaulting investors etc. 12. Obligations and duties of EBP: 12.1. An EBP shall: 12.1.1. provide an on-line platform for placing bids; 12.1.2. have necessary infrastructure like adequate office space, equipment, risk management capabilities, manpower and other information technology infrastructure to effectively discharge the activities of an EBP; 12.1.3. ensure that the PM, term sheet and other issue related info ..... X X X X Extracts X X X X X X X X Extracts X X X X
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