SEBI Delays Major Takeover Rule Change on Derivatives Amid Panel Concerns

• SEBI proposed including single-stock, cash-settled derivatives in 'share' definition for takeover rules.
• The aim was to prevent acquirers from gaining economic control via derivatives without triggering disclosure norms (e.g., 5% stake).
• SEBI's Takeover Panel has recommended postponing the change, deeming it premature and potentially confusing.
• The panel believes current concerns about derivatives' widespread use in takeovers are speculative.
• The door remains open for future amendments if the use of such instruments increases significantly.

Why It Matters: SEBI postpones derivative-related takeover rule changes, citing prematurity and potential confusion.