Repository of Documents Relied upon by Merchant Bankers During Due Diligence Process in Public Issues
As per Regulation 14 of the SEBI (Merchant Bankers) Regulations, 1992, merchant bankers are mandated to maintain records and documents related to the due diligence performed during both pre-issue and post-issue activities in issue management. Additionally, Regulation 16 of the same regulations requires these records and documents to be preserved for a minimum of five years.
To streamline the maintenance of records and documents used by merchant bankers during due diligence for public issues, stock exchanges have established an online Document Repository platform. This platform enables merchant bankers to electronically upload and manage these documents, ensuring easier access to records related to the public issue process, as required to be maintained by merchant bankers.
Merchant bankers are required to upload the relevant documents to the Document Repository platform of one of the stock exchanges and notify the other stock exchange(s) where the issuer company’s securities are proposed to be listed, as applicable. Stock exchanges have been instructed to guide merchant bankers by providing an indicative list of documents to be uploaded, prepared in consultation with the Association of Investment Bankers of India (AIBI), along with the process for uploading documents to the platform.
Merchant bankers shall adhere to the following timelines for uploading documents in the Document Repository platform of the Stock Exchanges:
From January 01, 2025:
- Within 20 days of filing draft offer document with SEBI / Stock Exchanges.
- Within 20 days from the date of listing on Stock Exchanges.
From April 01, 2025 onwards:
- Within 10 days of filing draft offer document with SEBI/ Stock Exchanges.
- Within 10 days from the date of listing on Stock Exchanges.
Merchant bankers are required to upload and maintain documents on the Document Repository platform using their individual login credentials, which will be accessible exclusively to them. However, these documents must be made available to SEBI for supervisory purposes when required. Further, Merchant bankers shall ensure that the documents uploaded in the Document Repository platform are relevant, complete and legible.
Applicability of this circular
The provisions of this circular shall be applicable for the draft offer documents filed on or after January 01, 2025 with SEBI / Stock exchanges for listing on Mainboard / SME exchanges.
SEBI (Depositories and Participants) (Third Amendment) Regulations, 2024
On December 2, 2024 SEBI amended SEBI (Depositories and Participants) Regulations, 2018, by inserting Regulation 60A – Nomination with respect to the beneficial owners, which states as follows:
- Participants must allow beneficial owners to nominate a person to inherit their securities in the event of their death, following the specified procedure.
- Participants must offer beneficial owners the option to nominate a person, as per the specified procedure, to act on their behalf in case of incapacitation.
- Joint beneficial owners of an account can collectively nominate a person, as specified, to inherit their securities if all joint owners pass away.
- The depository and participant shall not be liable for any action taken on the basis of nomination made by the beneficial owner.”
Master Circular for Depositories
SEBI has issued multiple circulars and directions to depositories over time. To consolidate these, a Master Circular was released on October 6, 2023, compiling all relevant and applicable circulars. This Master Circular aims to provide users with a single reference point for all directions pertaining to depositories which shall come into force on December 3, 2024 replacing earlier directives listed in the Schedule-A to the said Circular, and covers the relevant applicable circulars / communications pertaining to depositories issued by SEBI upto September 30, 2024.
The Master Circular is divided into four sections: –
- Beneficial Owner Accounts,
- Depository Participants Related,
- Issuer Related, and
- Depositories Related.
It includes provisions from relevant circulars and communications for each section. However, some cross-referencing between sections may occur. Users are encouraged to review other sections to ensure compliance with all applicable provisions.
Disclaimer: The information published in the above newsletter is collected from various sources in electronic medium and analyzed by the firm. The reader is advised to consult the attorney qualified in their jurisdiction, before acting on any information contained in this newsletter. India Juris excepts no liability what so ever in this regard.
