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Notices
Notice No20120222-34Notice Date22 Feb 2012
CategoryTradingSegmentEquity
SubjectGuidelines for Offer for Sale through the Stock Exchange Mechanism
Content

All Trading Member and Custodian registered with the Exchange are hereby informed that the Exchange would make available the OFFER FOR SALE platform on iBBS (Internet Based Book Building) platform with effect from 24th February 2012 as per SEBI circular CIR/MRD/DP/ 05/2012 dated February 1, 2012

 

Enclosed please find detailed operational instructions and guidelines for participation in OFS segment at BSE.

 

The guidelines also contain the requirements at the seller or promoter(s) end to be complied with when they intend to select the Exchange as Designated Exchange for any offer of sale of their shareholding. Members and Custodians are also required to refer to the above SEBI circular for further details.

 

 

For any further clarifications, Trading Members/Custodians and intending seller i.e. promoter(s) are advised to contact following Exchange officials –

 

Name of Official

Contact Number

Department

Email ID

Bhushan Mokashi

022-22728406

Listing Sales

bhushan.mokashi@bseindia.com

Radhika Khatau

022-22728892

Listing Sales

radhika.khatau@bseindia.com

Sanjay Narvankar Surendra Rashinkar

022-22728316

022-22728306

Clearing & Settlement

sanjay.narvankar@bseindia.com

surendra.rashinkar@bseindia.com

 

 

For and on behalf of BSE Limited

 

 

 

Girish Joshi

General Manager

Contents

           

1.     General Instructions. 3

1.1.  Offer for Sale (Segment) 3

1.2.  System configuration / requirements. 3

1.3.  Information on any OFS at BSE. 4

1.4.  Bid time and duration. 4

2.     Requirements of Seller / Promoter(s) 4

2.1.  Definition of seller / promoter(s) 4

2.2.  Dos and Don’ts for seller(s) / promoter(s) 4

2.3.  Undertaking and documents submission. 5

3.     Trading Parameters: 5

3.1.             Trading Calendar and Trading Hours. 5

3.1.1.          Market Timings and Trading Hours. 5

3.2.             Member(s) Eligibility and Contract Note Specifications. 6

3.2.1.          Member(s) Margin Requirement 6

3.2.2.          Contract Note Structure. 6

3.3.             OFS Bid Entry. 6

3.3.1.          Bid Entry Process Flow. 6

3.3.2.          Manual Bid Entry. 7

3.3.3.          Bulk Upload of OFS bids. 7

3.3.4.          Modification and Cancellation of OFS bids. 8

3.3.5.          Download of Bid book and Allocation File. 8

3.4.             Transaction Charges, Securities Transaction Tax (STT) and other levies. 8

3.5.             Clearing and Settlement 8

3.5.1.          Deposit of shares. 8

3.5.2.          Deposit of cash collateral 8

3.5.3.          Settlement Process. 9

4.     EOD Files (Trade Files & Other Files) 9

5.     Annexure 1. 10

5.1.1.          Bulk Upload File Formats in iBBS OFS Module: 10

6.     Annexure 2. 13

7.     Annexure 3. 15

8.     Annexure 4 (EOD Files) 17

 

1.          General Instructions

1.1.       Offer for Sale (Segment)

In accordance with SEBI Circular CIR/MRD/DP/05/2012 dated February 1, 2012, the Exchange has now enabled Offer for Sale (Segment) to all Trading Members of the Exchange on iBBS (Internet Based Book Building System) of the Exchange. All Trading Members are allowed to access this module. No separate registration or payment of any charges is required currently to access the OFS segment on iBBS.

 

This separate window would facilitate promoters to dilute/offload their holding in listed companies in a transparent manner wider participation.

1.2.       System configuration / requirements

The OFS module on iBBS module can be accessed from internet. Internet explorer version IE above 6 is most preferred mode to access OFS.

The url is : https://ibbs.bseindia.com/

 

Trading Members can also accessed the OFS module through leasedline

https://10.1.101.254/index.aspx

 

One of the core requirements in OFS module is to ensure cent percent (100%) cash collateral and a bid is validated against the cash deposited. Members have to use Real Time Risk Management System (RTRMS) for cash collateral management in OFS. The url for RTRMS system is as under:

 

Internet Users:

 

http://rtrms.bseindia.com/

 

Leased Line Users:

 

http://10.1.101.99/stocks/jsp/rms/index/html

 

1.3.       Information on any OFS at BSE

The Exchange would issue notice at least one trading day prior to any offer for sale by promoters on its website. (Refer example below). The notice would details name of the company, number of shares being offered, bid time, allocation methodology etc.

 

Example: If a seller wants to have offer opens say on March 2, 2012 Friday, the Exchange must issue notice on March 1, 2012 before market hours i.e. 9.00 AM. The seller / promoter(s) must submit application to the Exchange on Feb 29, 2012 end of business hours.

1.4.       Bid time and duration

The duration of the OFS shall not exceed one trading day and placing of bids by Trading Members shall take place during trading hours.

2.       Requirements of Seller / Promoter(s)

2.1.       Definition of seller / promoter(s)

                     i.   All promoter(s)/ promoter group entities of such companies that are eligible for trading and are required to increase public shareholding to meet the minimum public shareholding requirements in terms Rule 19(2)(b) and 19A of Securities Contracts (Regulation) Rules, 1957 (SCRR), read with clause 40A (ii) (c) of Listing Agreement.

                   ii.   All promoter(s)/ promoter group entities of top 100 companies based on average market capitalization of the last completed quarter.

 

For (i) and (ii) above, the promoter/promoter group entities should not have purchased and/or sold the shares of the company in the 12 weeks period prior to the offer and they Securities and Exchange Board of India should undertake not to purchase and/or sell shares of the company in the 12 weeks period after the offer.

2.2.       Dos and Don’ts for seller(s) / promoter(s)

1. Seller / promoter/ promoter group entities should not have been in the list of debarred entities as notified by SEBI.

2. The promoter/promoter group entities should not have purchased and/or sold the shares of the company (whose shares are offered in OFS) in the 12 weeks period prior to the offer and they should under not to purchase and/or sell shares of the company in the 12 weeks period after the offer.

3. Seller must inform the Exchange name of selling member broker at least one day prior to opening of the offer.

4. In case the seller(s) chooses not to publicly disclose the floor price, the seller(s) shall give the floor price in a sealed envelope to the Exchange (if BSE is designated stock exchange) before opening of the offer.

5. Seller(s) must ensure transfer of shares to selling members at least one day prior to the opening of the offer.

6. Seller(s) must ensure collection of funds from selling member brokers appointed by it.

7. Seller(s) must disclose upfront in its application to the Exchange conditions if any for withdrawal or cancellation of the offer.

8. Seller(s) can not extend or reduce bidding period once notice is issued by the Exchange on schedule of bidding.

2.3.       Undertaking and documents submission

The seller(s) / promoter(s) would be required to make application to the Exchange on its letter head as per the prescribed format as per Annexure 2. If there are more than one seller each one would be required to give the application separately.

 

The seller(s)/promoter(s) would have to execute an undertaking as per prescribed format as per Annexure 3 at the time of submitting application to the Exchange.

3.       Trading Parameters:

 

In pursuance of the trading regulations of the Exchange, following operating parameters are available for trading in Offer For Sale (OFS) segment –

3.1. Trading Calendar and Trading Hours

3.1.1. Market Timings and Trading Hours

The duration of the offer for sale will not exceed one trading day. The placing of orders by Trading Member(s) will take place during normal trading hours i.e. from 9:15 am to 3:30 pm. The seller as defined in 2.1 can decide the bidding period which can by any time during normal trading hours and subject to SEBI circular of February 1, 2012 on OFS through Stock Exchange Mechanism.

 

3.1.2. In case of market closure due to the incidence of breach of ‘market wide index based circuit filter’, the offer for shall be halted.

3.2. Member(s) Eligibility and Contract Note Specifications

3.2.1. Member(s) Margin Requirement

 

Every bid/order should be backed by 100% cash margin.

3.2.2. Contract Note Structure

Member(s) shall issue contract notes as per the same structure and specifications as in the equity market segment.

3.3. OFS Bid Entry

The bidding process for OFS segment will be available through iBBS module, under the OFS segment. The OFS segment supports manual as well as upload bid entry facility.

 

3.3.1.  Bid Entry Process Flow

 

At the order/bid entry level, for every order/bid 100% of the value of the offer/bid amount will be adjusted upfront on an on-line basis from the cash collateral deposited by the members with the Exchange/ICCL w.e.f. February 25, 2012, refer the Exchange’s Notice No.20120221-25 dated February 21, 2012.

 

In respect of institutional investors, Trading Members can either ensure availability of funds or margins of these customers at their end or give up such bids/orders to custodians.

 

                          There are two ways to give up bids in the bid entry module

 

On-line real time give-up:       

 

Members will also have a facility for on-line real-time give-up of bids to the Custodians for their confirmation. In such case, on confirmation by the Custodians, the cash collateral of the Custodians will be directly adjusted upfront on an on-line real-time basis without adjusting the bidding member’s cash collateral. For this purpose, the bid entry screen would enable the member to give up bids to Custodians at the time of bidding. However, such bids will be treated as incomplete bids and will be given temporary bid ids till confirmation by the Custodians. Once these bids are accepted by custodians via RTRMS, the bids will be treated as confirmed bids and would be considered for the display for indicative or weighted average price on the Exchange site. If the on-line given-up bids are either rejected by the Custodians or not confirmed by the Custodians till end of the bid session on T day, then such bids will be treated as cancelled and will accordingly lapse.

 

Offline Give up:

 

In case of an off-line give up facility, the members must not enter the Custodian Clearing code while bidding in OFS iBBS module. Hence, initially at the time of order/bid entry the member’s cash collateral will be adjusted on-line upfront as mentioned above. Such bids will be considered normal i.e. valid bids. Members can give up such bids via RTRMS after the bids session on T day till 11.00 am on T+1 day. The Custodians can confirm such valid bids by 11.00 a.m on T+1 day, accordingly Custodian shall be required to do settlement of such bids with the Clearing Corporation.

 

3.3.2.  Manual Bid Entry

The bid entry screen will require the following data to be provided by the users (Trading Members)

Field Name

Requirement

Action

OFS Symbol

Mandatory

Dropdown Menu

Category

Mandatory

MF / IC / OTHS

Application / Ref No.

Non Mandatory

Alpha Numeric

UCC

Mandatory

Alpha Numeric

Custodian Code / ID*

Non Mandatory

Numeric only Required for Give Up Bids

Qty

Mandatory

Numeric

Price

Mandatory

Numeric

Value

Mandatory

Auto Generated

                       

* Members please note that only custodian code which is numeric is to be entered in the field of Custodian Code/ID. CP Codes are not to be entered in this field.

3.3.3. Bulk Upload of OFS bids

A bulk upload facility will be available within the OFS module. Upto 500 records can be uploaded by members in a single comma or pipe separated .csv or .txt file. Submitting the file will lead to blocking of margin in RTMS against the said member’s cash 100% collateral deposited with the Exchange. The bids successfully accepted will be allotted a bid id or order no. For file format refer Annexure 1.

 

Note: The bids having a Custodian code / id once submitted will be allotted a temporary bid id (order no). Once the bid is accepted or approved by the Custodian it shall be treated as a confirmed bid. For bids wherein margin is blocked against cash collateral of members, members can be given up to Custodian on T+1 day.

3.3.4. Modification and Cancellation of OFS bids

Successful bids would be available for modification and cancellation. Bids can be modified or cancelled manually and via bulk upload facility. Modification and cancellation will not be allowed in the last 30 minutes before the closure of the issue.

 

Bid Status

Modification

Cancellation

Before Give Up

Allowed

Allowed

After Give Up till approved by Custodian

Allowed

Allowed

After Give Up, after approval by Custodian

Not Allowed

Allowed

3.3.5. Download of Bid book and Allocation File

The bid book download will be available in the OFS module in real time basis. The provisional allocation file shall be available within the same screen on T day. PAN number of the client/buyer shall be considered for allocation, therefore PAN number in the UCC details given to the Exchange is mandatory for a bid to be reckoned as valid order.

3.4.  Transaction Charges, Securities Transaction Tax (STT) and other levies

Transaction Charges, STT and other levies currently collected in the equity segment would be applicable for OFS segment.

 

Selling members would be provided trade file for collection of required charges and levies.

3.5. Clearing and Settlement

3.5.1. Deposit of shares

Selling members would be required to deposit shares with the Exchange for OFS in advance before 11.00 am on T – 1 day where T is day for offer for sale.

3.5.2. Deposit of cash collateral

Buyer Members/Custodian Members will be required to upfront deposit cash collateral for bidding on OFS Segment. The process of depositing cash collateral is the same as that of Equity Cash Segment. However, while instructing the Clearing Banks for the same, the members should specify the segment. W.e.f February 25, 2012, inter alia, the collateral is to be deposited in favour of Indian Clearing Corporation Ltd, for all the segments of BSE. For details, members are advised to refer to the BSE Notice No.20120221-25 dated February 21, 2012, in this regard.    

3.5.3. Settlement Process

Provisional obligations for settlement will be downloaded to the members at end of T day and final obligations for settlement will be down loaded to the  members on  T + 1 day. 

 

The net funds pay-in obligation of members pertaining to the OFS segment shall be adjusted against the cash collateral deposited by the concerned members for the respective settlement and the balance on account of other dues shall be recovered on the pay-in day through the pay-in process from settlement accounts of the members maintained with designated clearing banks. The pay-in and pay-out of funds and securities for OFS segment is to be done through the designated clearing bank accounts and securities pool accounts currently used by members of BSE in Equity Cash Segment respectively.

 

The market types for giving instructions to the Depositories for securities pay-in pertaining to Offer for Sale segment would be “OFS”.

 

A typical settlement cycle for OFS Segment shall be as under:

 

Activities

Timings

T Day  :

 

Provisional Settlement obligations download.

 By 6.00 pm (approx)

T+1  Day  :

 

Confirmation of give-up bids by Custodians

 By 11.00 am

Final Settlement obligations download

 By 12.30 pm (approx)

T+2 day

 

Processing of pay-in of funds and securities.

10:00 am.

Pay- out of securities/funds

12:30 pm.

4.       EOD Files (Trade Files & Other Files)

All end of day files will be available on extranet. Provisional trade file will be available to members on T day after end of session. Final trade file will be available to members on T+1 day. The file formats will be same as equity segment. Refer Annexure 4 for file formats.

Extranet Url: https://member.bseindia.com

 

5.       Annexure 1

5.1.1. Bulk Upload File Formats in iBBS OFS Module:

 

UPLOAD_FILE_FORMAT FOR MEMBER

Field Name

Mandatory / non-Mandatory

Alpha / Numeric

Length

Remark

OFS Symbol

Mandatory

Alphanumeric

10

Symbol of the Company/IPO

Category

Mandatory

Alphanumeric

5

Client Status master values would remain constant over all the scrips i.e.IC.MF and OTH

Application/   Reference No

Non Mandatory

Alphanumeric

16

Application number of the Form

UCC

Mandatory

Alphanumeric

12

UCC registered with the Exchange for equity trading

Custodian clearing code

Non Mandatory

Alphanumeric

12

Custodial clearing codes

Qty

Mandatory

Numeric

11

Quantity should always be in multiple of market lot

Price

Mandatory

Numeric

6.2

Bid price which should be more or equal to the floor price

Bid Id

Mandatory

Numeric

16

Bid Id is auto generated by the exchange. In case of generation of error file, values  will be 0(zero) only if action code is N. For modification/deletion the Bid value has to be populated by Bid Id.

Action Code

Mandatory

Alphanumeric

1

Action code, i.e., “N” for new record, “M” for to be modified record and “D” for to deletion records.

 

SUCCESS_FILE_FORMAT FOR MEMBER

Field Name

Mandatory / non-Mandatory

Alpha / Numeric

Length

Remark

OFS Symbol

Mandatory

Alphanumeric

10

Symbol of the Company/IPO

Category

Mandatory

Alphanumeric

5

Client Status master values would remain constant over all the scrips i.e.IC.MF and OTH

Application/   Reference No

Non Mandatory

Alphanumeric

16

Application number of the Form

UCC

Mandatory

Alphanumeric

12

UCC registered with the Exchange for equity trading

Custodian clearing code

Non Mandatory

Alphanumeric

12

Custodial clearing codes

Qty

Mandatory

Numeric

11

Quantity should always be in multiple of market lot

Price

Mandatory

Numeric

6.2

Bid price which should be more or equal to the floor price

Bid Id

Mandatory

Numeric

16

Bid Id is auto generated by the exchange of generation of response filet will be 0(zero) only of action code is N

Action Code

Mandatory

Alphanumeric

1

Action code, i.e., “N” for new record, “M” for to be modified record and “D” for to delete records.

 

REJECTION_FILE_FORMAT FOR MEMBER

Field Name

Mandatory / non-Mandatory

Alpha / Numeric

Length

Remark

OFS Symbol

Mandatory

Alphanumeric

10

Symbol of the Company/IPO

Category

Mandatory

Alphanumeric

5

Client Status master values would remain constant over all the scrips i.e.IC.MF and OTH

Application/   Reference No

Non Mandatory

Alphanumeric

16

Application number of the Form

UCC

Mandatory

Alphanumeric

12

UCC registered with the Exchange for equity trading

Custodian clearing code

Non Mandatory

Alphanumeric

12

Custodial clearing codes

Qty

Mandatory

Numeric

11

Quantity should always be in multiple of market lot

Price

Mandatory

Numeric

6.2

Bid price which should be more or equal to the floor price

Bid Id

Mandatory

Numeric

16

Bid Id is auto generated by the exchange of generation of response filet will be 0(zero) only of action code is N

Action Code

Mandatory

Alphanumeric

1

Action code, i.e., “N” for new record, “M” for to be modified record and “D” for to delete records.

Error text

Mandatory

Alphanumeric

40

Gives detailed description of the error encountered during upload

 

BD File for OFS Issues (Member Bid Book)

Field Name

Data Type

Length

Remarks

OFS Symbol

Alphanumeric

10

Symbol of the Company/IPO

Category

Alphanumeric

5

Client Status master values would remain constant over all the scrips i.e.IC.MF and OTH

Application/   Reference No

Alphanumeric

16

Application number of the Form

UCC

Alphanumeric

12

UCC registered with the Exchange for equity trading

Custodian clearing code

Alphanumeric

12

Custodial clearing codes