Context:
The National Stock Exchange of India (NSE) and Bombay Stock Exchange (BSE) have introduced a new Standard Operating Procedure (SOP), effective from August 1, 2025, to expedite regulatory approvals for mergers and demergers involving listed companies. The Securities and Exchange Board of India (SEBI) has mandated this framework to bring predictability and speed to an otherwise lengthy process.
Key Features of the SOP for Scheme Processing
- Faster Processing: Applications with complete documents processed within 7 working days, down from 3-5 months earlier.
- Digital Filing Only: Physical paperwork abolished; submissions must be through NSE’s or BSE’s digital platforms.
- Strict Timelines: Draft schemes to be filed within 15 days of board approval; only two opportunities to respond to exchange queries.
- Sequential Approvals: Exchanges issue NOC/observation letters to SEBI; post-SEBI approval, companies approach NCLT for final sanction.
Challenges
- NCLT Approval Still Required: Lengthy NCLT process remains a bottleneck.
- Sequential Steps Cause Delays: Stepwise approvals extend deal timelines.
- No Fixed SEBI Deadline: Lack of statutory timeline for SEBI clearance creates uncertainty.
- Procedural Rigidity Risks: Strict rules and limited responses risk delays or rejections, with no clear appeal mechanism.
