<p>The promoters can not be allotted such warrants or shares if they have sold shares in past six months or if they have failed to convert the warrants in the previous one year, Sebi decided at its Board meeting here today.<br /><br />Sebi said, "In order to further tighten the preferential allotment framework, the Board decided that in case of preferential issues, where any promoter has previously subscribed to the warrants of the company but failed to exercise the warrants, shall be ineligible for issue of equity shares or convertible securities or warrants for a period of one year from the date of expiry of the currency /cancellation of the warrants."<br /><br />It added, "The Board further decided that if any member of the promoters has sold shares in the previous six months, then the promoters would be ineligible for allotment on preferential basis."<br /><br />Incidentally, the issue of allotment of warrants came to the fore recently when Sebi rejected a proposal from MCX-SX to begin trading in equity and segments other than currency futures. Sebi had raised questions over MCX-SX issuing preferential warrants to the promoters.<br /><br />The promoters of the bourse, however, maintained that warrants were issued to meet the shareholding eligibility norms and their holding would not breach the permissible limit whenever the warrants are converted into shares.<br /><br />MCX-SX is allowed to trade in currency futures only and its application for currency options also remains pending, although two other bourses NSE and United Stock Exchange (USE) recently got permission for both types of currency derivatives.<br /><br />Asked about Sebi's likely move on MCX-SX's application for currency options trading, Bhave said on a lighter note: "If you want to know what SEBI was likely to do, then I'm unlikely to comment."<br /><br />"The factual position is that the two bourses have got the permission and MCX-SX has not," he said, while declining to comment any further on the issue.</p>
<p>The promoters can not be allotted such warrants or shares if they have sold shares in past six months or if they have failed to convert the warrants in the previous one year, Sebi decided at its Board meeting here today.<br /><br />Sebi said, "In order to further tighten the preferential allotment framework, the Board decided that in case of preferential issues, where any promoter has previously subscribed to the warrants of the company but failed to exercise the warrants, shall be ineligible for issue of equity shares or convertible securities or warrants for a period of one year from the date of expiry of the currency /cancellation of the warrants."<br /><br />It added, "The Board further decided that if any member of the promoters has sold shares in the previous six months, then the promoters would be ineligible for allotment on preferential basis."<br /><br />Incidentally, the issue of allotment of warrants came to the fore recently when Sebi rejected a proposal from MCX-SX to begin trading in equity and segments other than currency futures. Sebi had raised questions over MCX-SX issuing preferential warrants to the promoters.<br /><br />The promoters of the bourse, however, maintained that warrants were issued to meet the shareholding eligibility norms and their holding would not breach the permissible limit whenever the warrants are converted into shares.<br /><br />MCX-SX is allowed to trade in currency futures only and its application for currency options also remains pending, although two other bourses NSE and United Stock Exchange (USE) recently got permission for both types of currency derivatives.<br /><br />Asked about Sebi's likely move on MCX-SX's application for currency options trading, Bhave said on a lighter note: "If you want to know what SEBI was likely to do, then I'm unlikely to comment."<br /><br />"The factual position is that the two bourses have got the permission and MCX-SX has not," he said, while declining to comment any further on the issue.</p>