Capital markets regulator Sebi on Monday permitted subscription to non-convertible securities (NCS) during the trading window closure period, marking a significant update to its insider trading norms. This latest move enables the market participants to subscribe to non-convertible securities without being constrained by the trading window restrictions.
However, the trading window restrictions will not apply with respect to transactions, such as acquisition by conversion of warrants or debentures, subscribing to rights issues, further public issues, preferential allotment or buy-back and open offers.
Sebi noted that earlier exemptions, extended through a 2020 circular, included rights entitlements and offer-for-sale (OFS) transactions.
“It has been decided that in addition to the transactions mentioned in PIT (Prohibition of Insider Trading) regulations, the trading window restrictions shall also not apply to subscription to the issue of non-convertible securities, carried out in accordance with the framework specified by the Board from time to time,” Sebi said in a circular.
The circular directs all stock exchanges to notify listed companies about the provisions and ensure the information is made available on their websites. The change is effective immediately.
This development will bolster investor confidence and streamline the subscription process for non-convertible securities, a key financing tool for companies.
