The Securities and Exchange Board of India (SEBI) has recently removed the requirement for companies to obtain a no-objection certificate (NOC) in order to release their security deposit when listing on stock exchanges.

This change, which took effect on November 21, is a result of an amendment made to the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 on May 17, 2024.

Previously, companies were obligated to deposit one percent of their public subscription issue size as a security deposit, which could only be released upon submission of the NOC issued by SEBI.

However, the recent circular from SEBI confirms that this NOC requirement has been eliminated, simplifying the process for companies to access their deposited funds.

Additionally, the circular also mentions that the Master Circular on the issuance of NOCs for the release of the security deposit has been officially rescinded, indicating a significant regulatory change aimed at facilitating smoother operations in the capital market.