SEBI Delays Expanding Takeover Rules for Cash-Settled Derivatives

• SEBI is likely to defer its proposal to expand takeover rules to include cash-settled derivatives.
• The Takeover Panel deemed the proposal 'premature' and 'potentially disruptive' to the existing framework.
• SEBI aimed to prevent acquirers from masking control via derivatives, citing global cases like Porsche-Volkswagen.
• The panel argued that single-stock derivatives are currently limited in India, making the proposal 'pre-emptive'.
• It suggested modifying rules only if such instruments become prominent in the future, avoiding current complications.

Why It Matters: SEBI defers expanding takeover rules for derivatives, citing panel concerns over timing and disruption.