Markets regulator Sebi on Thursday abolished the requirement of a mandatory security deposit with the exchanges before a public issue in a bid to facilitate ease of doing business for issuer companies.
The move will be applicable with immediate effect, the Securities and Exchange Board of India (Sebi) said in a circular.
Before this, any company that is looking to launch a public issue of equity shares has to deposit with the stock exchanges an amount equal to 1 per cent of the issue size. The deposit was returned to the company after the public issue.
"In order to facilitate ease of doing business to issuer company, the requirement to deposit 1 per cent of the issue size available for subscription to the public with the designated stock exchange by the issuer company under... Sebi (Issue of Capital and Disclosure Requirements) Regulations, 2018 (ICDR Regulations) has been dispensed with," Sebi said.
In February, the Securities and Exchange Board of India (Sebi) floated a consultat