Sub.   : Revised guidelines/processes for acquisition of shares through Stock Exchange pursuant to Tender-Offers under Takeovers, Buy Back and Delisting.

Attention of Members & Custodians is drawn to SEBI circulars no. CFD/DCR2/CIR/P/2016/131 dated      Dec 09, 2016, and Exchange Notice No.20170202-34 Dated February 2, 2017 on the captioned subject.

The revised operational guidelines for the settlement process as per the new mechanism prescribed in the aforesaid circulars are as under:

Settlement of Demat Shares:

1)      Members to note that the revised settlement guidelines will be applicable for all the new issues pertaining to Tender-Offers under Takeovers, Buy Back and Delisting that will commence w.e.f. February 07, 2017. The settlement of issues pertaining to Tender-Offers under Takeovers, Buy Back and Delisting that have commenced before February 7, 2017 will be carried out as per the existing settlement mechanism only.

2)      ICCL would notify separate settlement calendar for all Tender Offers, facilitated by Exchange through its online bidding platform IBBS, as is currently being done.

3)      Members/Custodians to note that the bids for demat shares will not be accepted/confirmed in IBBS platform, without early pay-in of shares.

4)      The clients of the Members will be required to deliver the demat shares to ICCL through the Early Pay-in mechanism of Depositories as is being done at present by using the settlement type and settlement number as specified in settlement calendar.

5)      In CDSL, the early pay in of shares will be initiated only through the beneficiary account of the client by transferring them directly in the members early pay in account maintained with the clearing corporation. This will entail that the existing system of transferring the shares in the principal account of the member by the client, and the member then transferring the shares in its early pay-in account maintained with the clearing corporation will be discontinued w.e.f. February 7, 2017 for the 3 market types, viz; Buyback, Delisting and Takeover. The members and their clients to note that they will be permitted to follow the existing mechanism of early payin till February 6, 2017 and would be required to follow the new mechanism as stated in this para above after February 7, 2017 for the OTB issues which have started before February 7, 2017 and close after February 7, 2017.

6)      In NSDL the client will issue the delivery instruction slip to its depository participant office as is being currently done. However the members will not be required to issue Irreversible Delivery Out (IDO) instruction to complete the early pay-in for the 3 market types, viz; Buyback, Delisting and Takeover. The members are required to note that till February 6, 2017 they will be required to deliver the IDO for the OTB issues which have commenced before February 7, 2017 and close after February 7, 2017.

7)      Members to further note that they will not be required to upload the EPN file, through the extranet module for all new offers w.e.f. February 7, 2017. However they will have to continue to upload the EPN file for the issues that have commenced before February 7, 2017, till the closure of the issue.

8)      Trading members would be required to mention DP-ID/Client-ID and CP code of their Clients in the bidding window in order to give up the bids for confirmation by the Custodian. The Custodian members will be required to deliver the early pay-in of shares and upload the EPN file before they can confirm the bids given up by the trading members pertaining to their clients.

9)      The shares delivered through early pay-in mechanism, will be treated as Securities Pay-in, on behalf of the Members/Custodians whose bids will be accepted as per the allotment process.

10)   The Buyer Member will be required to provide DPC file giving demat details of Escrow A/c of the client for transfer of the shares in Securities pay-out.

11)   The shares of the Members whose bids have not been accepted (unsuccessful bids) will be returned back in the respective clients’ demat accounts from which early pay-in was received. Any failure to credit the clients account for any reason, will result in the delivery of such shares in the pool account of the member pertaining to that client.

Settlement of Physical Shares:

1)      Members are requested to refer to point no 2.3.3 stated in the Annexure A, Operational Guidelines for Offer to Buy (OTB) Window attached with Notice No 20150630-40 dated June 30, 2015, pertaining to the bidding and settlement process of physical shares.

2)      Any excess physical shares after allotment process, will be returned back to the concerned Investors directly by the respective RTA.

Funds Settlement for buyers

1)      The concerned buyer members would be required to make the funds pay-in in the settlement account of ICCL by 11:00 a.m. on settlement date.

2)      Transaction Charges and any other charges will be collected from buyer member’s settlement bank account.

Funds Settlement for sellers

1)      The funds payout to the clients offering their shares towards tender-offers under Takeovers, Buy Back and Delisting (other than those mentioned in point No. 2 hereunder) will be directly credited to their bank accounts received from the depositories after deduction of STT. Hence it is very important for the clients to update their bank accounts including the IFSC codes, MICR codes etc. correctly in their demat accounts with the depositories.

2)      All funds pay-out which are rejected by clients’ banks due to any reason, will be transferred to the member’s settlement bank account for further transfer to the respective clients.

The funds payout pertaining to the clients whose bids are confirmed by the Custodians will be credited to the settlement bank account of the custodian.

The funds payout pertaining to the bids of client types viz. NRI, Foreign Clients etc. (where there are specific RBI and other Regulatory requirements pertaining to funds pay-out) as per the details provided by RTA, will be transferred to custodian’s/member’s settlement bank account as the case may be.

For any further clarifications, Members & Custodians may contact the following officials:-

For and on behalf of Indian Clearing Corporation Ltd.

Sanjay Narvankar

Deputy General Manager

February 03, 2017