Securities (Preferential Offer) Rules 2017

A preferential offer is defined as –

(a) an offer or issue of securities that is a private placement;

(b) an offer or issue of securities that is made only to sophisticated investors; or

(c) an offer or issue of securities only to related corporations of the issuer of the securities.

The Rules, inter alia, provides for the conditions to be fulfilled when making a preferential offer, the period of time for the allotment of securities, notification to be made to the Financial Services Commission and the contents of the preferential offer document.

Moreover, for an issuer of debt securities who is targeting 25 investors or more, that issuer will need to either seek a listing on a securities exchange or be rated by a credit rating agency licensed under the Financial Services Act.

Also, the minimum cost of subscription for a private placement is Rs 1 million. However, for a professional collective investment scheme, the minimum cost of subscription is 200,000 United States dollars.