Market regulator SEBI has approved rules to expedite rights issues. SEBI has eased the norms, which is more attractive than the current market favourite - the preferential allotment route. The rights issue will be completed in 23 working days from the date of the issuer's board meeting, while the average timeline at present is 317 days. This mechanism will also be faster than the preferential allotment route which takes 40 working days. Moreover, it will give the company's existing shareholders an opportunity to participate even more in the company's future growth potential.

The current requirement of filing a draft letter of offer with SEBI for issuing its observations has been done away with, instead it will be filed with the stock exchanges for in-principle approval as the entity is already a listed entity. The stock exchanges will confirm that the issuer is complying with the LODR disclosure requirements.

The Letter of Offer content will be rationalised to include only the relevant incremental information regarding the rights issue such as issue object, price, record date, entitlement ratio etc.
 

Other major decisions of SEBI board

1. Changes in derivatives and F&O rules not discussed in market regulator SEBI's board meeting

2. UPI block mechanism or 3-in-1 trading approved for stock brokers from February 2025

3.Approval for extension of T+0 settlement rule for top 500 market cap stocks

4. Rules will be easier for investment advisors and research analysts.

5. Rules approved to complete rights issue in 23 business days, single filing system approved for entities listed on all stock exchanges

6. MF Lite framework to be launched with easier rules for passive funds