SEBI Enables Subscription of Non-Convertible Securities During Trading Window Closure

The Securities and Exchange Board of India (SEBI) recently made a noteworthy change to its insider trading norms by allowing subscription to non-convertible securities (NCS) during the trading window closure period. This update gives market participants the flexibility to subscribe to NCS without being limited by trading window restrictions.

While this change is significant, it’s important to note that certain transactions like acquiring warrants or debentures, subscribing to rights issues, and other specified transactions are still exempt from trading window restrictions. SEBI had previously extended exemptions for rights entitlements and offer-for-sale (OFS) transactions in a 2020 circular.

According to SEBI, this update means that the trading window restrictions will not apply to subscription to non-convertible securities, as long as it follows the framework specified by the Board. This change is effective immediately and is aimed at simplifying the subscription process for non-convertible securities, which are an important financing tool for companies.

SEBI directs stock exchanges to inform listed companies about these provisions and to ensure that the information is easily accessible on their websites. This move is expected to enhance investor confidence and streamline the process for subscribing to non-convertible securities.