SEBI provides framework for counter offer process

Prelims level : Banking Mains level : GS - III
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Markets regulator SEBI came out with the framework and timeline for the counter offer process.

The counter offer is made in case the price discovered through reverse book building (RBB) is not acceptable to the promoter or the acquirer.

What Is a Counteroffer?

A counteroffer is the response given to an offer. A counteroffer means the original offer was rejected and replaced with another one. The counteroffer gives the original offerer three options: accept the counteroffer, reject it, or make another offer.

There is typically no binding contract between the parties involved until one accepts the other’s offer.Counteroffers are prevalent in many types of business negotiations, transactions, and private deals between two individuals. You may find them in real estate deals, employment negotiations, and car sales.

Securities and Exchange Board of India (SEBI)

  • SEBI is the statutory regulator for the securities market in India.
  • It was established in 1988 and given statutory powers through the SEBI Act, 1992.
  • Purpose: Protect the interests of investors in securities, promote the development of securities market and to regulate the securities market.
  • SEBI is responsive to needs of three groups, which constitute the market i.e.
    • Issuers of securities,
    • Investors and
    • Market intermediaries.
  • It has three functions:
    • Quasi-legislative (drafts regulations in its legislative capacity),
    • Quasi-judicial (passes rulings and orders in its judicial capacity) and
    • Quasi-executive (conducts investigation and enforcement action in its executive function).
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