Tendering of shares in open offers, buybacks and delisting offers by marking lien in the demat account of the shareholders

Last updated: 14 August 2021

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The Securities and Exchange Board of India (SEBI) has introduced a new mechanism for tendering shares during open offers, buybacks, and delisting events. Instead of directly transferring shares, a lien will be marked against them in your demat account. Only the shares accepted in the offer will be debited, with the lien released on any unaccepted shares. This change aims to reduce systematic risk and make the process more investor-friendly.

Securities and Exchange Board of India CIRCULAR SEBI/HO/CFD/DCR-III/CIR/P/2021/615 August 13, 2021 To Recognized Stock Exchanges Registered Depositories Registered Stock Brokers Registered Merchant Bankers Registered Registrars to an Issue and Share Transfer Agents Registered Depository Participants Sir / Madam, Subject: Tendering of shares in open offers, buybacks and delisting offers by marking lien in the demat account of the shareholders. 1. SEBI, videCircular No.

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FAQ :

The new SEBI circular introduces a revised mechanism for tendering shares in open offers, buybacks, and delisting offers by marking a lien in the shareholder's demat account.

A lien will be marked against the shares you offer in a tender. Upon finalisation of entitlements, only the accepted quantity of shares will be debited from your demat account. Any unaccepted shares will have the lien released.

The revised mechanism will be applicable to all tender offers for which a Public Announcement is made on or after October 15, 2021.

This new system aims to reduce systematic risk and risks associated with the movement of securities, making the tendering process more investor-friendly.

The circular states that all other procedures shall remain unchanged, but the shares will be marked with a lien instead of being directly transferred initially.