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NEW DELHI: 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% of the issue size. The deposit was returned to the company after the public issue. In Feb, Sebi floated a consultation paper proposing that the requirement of 1% security deposit for public or rights issues should be done away with.
Sebi had stated that the requirement of 1% security deposit was put in place for public/rights issues so that an issuer resolves investor complaints relating to the transaction.
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