New Sebi framework simplifies lock-in rules for pre-IPO pledged shares

New Delhi: Capital markets regulator Sebi has introduced a mechanism for the lock-in of pledged shares in a bid to streamline requirements related to public issues.

Under the new framework, Sebi has allowed depositories to mark certain securities as “non-transferable” for the duration of the lock-in period in cases where a conventional lock-in cannot be created.

The move follows an amendment to the Sebi (Issue of Capital and Disclosure Requirements) Reg-ulations, 2018 (ICDR Regulations) through a notification dated March 21.

To operationalise the mechanism, depositories have put in place a framework requiring issuers to incorporate suitable provisions in their Articles of Association, inform lenders or pledgees, and make appropriate dis-closures in offer documents, Sebi said.

Depositories have also updated their systems and processes to facilitate the implementation.