Regulatory Alerts2018-11-15
Added · Updated
Companies (Further Issue of Shares) Regulations, 2018
These regulations establish conditions for companies issuing further capital through right shares, bonus shares, employee stock option schemes, and shares other than rights. They impose a one-year cooling-off period for listed companies making right issues and mandate board approvals, specific disclosures, and timely notifications to the Securities and Exchange Commission and securities exchanges. The rules define pricing limits, including restrictions on issuing shares at a premium or discount based on market price and free reserves, and require underwriting or subscription undertakings from directors in certain cases. Additionally, they set procedural requirements for bonus issues, such as retaining fifteen percent of enhanced paid-up capital as free reserves, and detail application processes for non-right share issuances.