Section 17A of SCRA : Section 17A: Public Issue And Listing Of Securities Referred To In Sub-Clause (Ie) Of Clause (H) Of Section 2

Explanation using Example

Imagine a company called FutureTech Innovations, which specializes in renewable energy technology, wants to issue a new type of bond to raise capital for a large-scale solar farm project. These bonds are structured as asset-backed securities, a category of securities referred to in sub-clause (ie) of clause (h) of Section 2 of the Securities Contracts (Regulation) Act, 1956.

Before FutureTech can offer these bonds to the public, they must meet the eligibility criteria and comply with requirements set by the Securities and Exchange Board of India (SEBI) according to Section 17A(1) of the Act. They must also apply for and receive permission to list these securities on a recognized stock exchange, as per Section 17A(2).

If FutureTech fails to obtain the necessary listing permission from the stock exchange, they are obligated under Section 17A(3) to refund all the money collected from investors within eight days, failing which they will face interest charges at an annual rate of 15% starting from the ninth day. The calculation of these days will exclude public holidays as defined by the Negotiable Instruments Act, 1881.

Additionally, all the rules that apply to the listing of securities by a public company will also apply to FutureTech's bonds, as they are a special purpose distinct entity issuing securities referred to in sub-clause (ie) of clause (h) of Section 2, as clarified by Section 17A(4).