SEBI Abolished 1% Mandatory Security Deposit Requirements in Public Issues

Published on November 29, 2024
Current Context: SEBI has abolished the 1% mandatory security deposit requirement for companies issuing public shares.
SEBI Abolished 1% Mandatory Security Deposit Requirements in Public Issues
  • Effective from November 21, 2024, this change is designed to ease the process of doing business.
  • Companies previously had to deposit 1% of the issue size with stock exchanges, which was later returned post-issue.
  • Market Reforms like ASBA and UPI payments have reduced investor complaints, making this security deposit less necessary.
  • This move simplifies the fundraising process and encourages more companies to go public.

Question:

1 What has SEBI recently abolished for companies issuing public shares?

  • A) The 1% mandatory security deposit requirement
  • B) The minimum public offer size
  • C) The lock-in period for promoters' shares
  • D) The requirement for independent directors
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