SCORES 2.0 New Technology to strengthen SEBI Complaint Redressal System for Investors
SEBI, vide press release dated April 1, 2024, launched the new version of the SEBI Complaint Redress System ("SCORES 2.0"). The salient features of SCORES 2.0 are as follows:
- reduced and uniform timelines for redressal of investor complaints across the securities market i.e., 21 (twenty-one) calendar days from date of receipt of complaint;
- introduction of auto-routing of complaints to the concerned regulated entity so as to eliminate time lapses, if any, in the flow of complaints;
- providing 2 (two) levels of review: (a) first review by the 'Designated Body' if the investor is dissatisfied with the resolution provided by the concerned regulated entity; and (b) second review by SEBI if the investor is still dissatisfied after the first review; and
- introduction of auto-escalation of complaint to the next level in case of nonadherence to the prescribed timelines by the regulated entity or the Designated Body.
SEBI (Issue of Capital and Disclosure Requirements) (Amendment) Regulations, 2024
SEBI, vide notification dated May 17, 2024, amended the principal regulations with an aim to expand the scope of entities eligible to contribute towards capital issues, especially by non-individual public shareholders and entities within the promoter group holding at least 5% of the post-issue capital. Some of the key amendments are as follows:
- under minimum promoters' contribution, if the post-issue shareholding of the promoters is less than 20%, any non-individual public shareholder holding at least 5% of the post-issue capital or any entity forming part of promoter group other than the promoter(s), may contribute to meet the shortfall in minimum contribution as specified for the promoters;
- specified securities acquired by any non-individual public shareholder holding at least 5% of the post-issue capital or any entity (individual or non-individual) forming part of promoter group other than the promoter(s) during the preceding 1 (one) year at a price lower than the price at which specified securities are being offered to the public in the initial public offer will not be eligible for the computation of minimum promoters' contribution;
- for the computation of minimum promoters' contribution, equity shares arising from the conversion or exchange of fully paid-up compulsorily convertible securities, including depository receipts, that have been held by the promoters at least 1 (one) year prior to the filing of the draft offer document forming part of promoter group other than the promoter(s) will be eligible, provided full disclosures of the terms of conversion is made, and they are converted into equity shares prior to filing of the red herring prospectus; and
- with respect to the period of subscription, in case of a force majeure event, the issuer may, for reasons to be recorded in writing, extend the bidding (issue) period disclosed in the red herring prospectus (in case of a book built issue) or the issue period disclosed in the prospectus (in case of a fixed price issue), for a minimum period of 1 (one) working day (earlier this was 3 (three) working days).
Ease of doing business for existing investors and unitholders
For ease of compliance and investor convenience, SEBI, vide circular dated June 10, 2024, has introduced the following changes for existing investors/unitholders:
- non-submission of 'choice of nomination' must not result in freezing of demat accounts as well as mutual fund folios;
- securityholders holding securities in physical form will be eligible for receipt of any payment including dividend, interest or redemption payment as well as to lodge grievance or avail any service request from the RTA even if 'choice of nomination' is not submitted by these securityholders; and
- payments including dividend, interest or redemption payment withheld presently by the listed companies/RTAs, only for want of 'choice of nomination' must be processed accordingly.
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