Requirement to issue NOC for release of 1% of issue amount deposited with designated stock exchange in case of IPO - MMJC

In a move to simplify compliance, SEBI has withdrawn the requirement to deposit 1% issue size available to public for subscription as deposit with designated stock exchange by the issuer company.

What Was the Provision?

Under Regulation 38(1) of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 (ICDR), issuer companies were required to deposit 1% of the issue size available for public subscription with the designated stock exchange. To retrieve this deposit, issuers had to obtain a No Objection Certificate (NOC) from the stock exchange, a process governed by SEBI’s Master Circular dated November 7, 2022.

What Is the Change?

• Following an amendment to the ICDR Regulations (notified on May 17, 2024), the requirement for issuers to deposit 1% of the issue size has been eliminated.
• Consequently, the Master Circular dated November 7, 2022, regarding NOCs for the release of these deposits, has been withdrawn.
• For deposits already made before this amendment, stock exchanges will jointly develop a standard operating procedure (SoP) to facilitate their release.

Effective Date:

This change is effective immediately as of November 21, 2024.

For more detailed information, please refer to the full circular here: https://www.sebi.gov.in/legal/circulars/nov-2024/withdrawal-of-master-circular-on-issuance-of-no-objection-certificate-noc-for-release-of-1-of-issue-amount_88655.html