Capital Market and Securities Laws · Listing Obligations and Disclosure Requirements

Section 17A SCRA: Public Issue and Listing of Securities

Updated 11 October 2026 · Fact-checked

Section 17A of the SCRA says securities of the kind in section 2(h)(ie) cannot be offered to the public or listed unless the issuer meets SEBI's eligibility criteria. The issuer must apply for listing before issuing the offer document. Section 11A of the SEBI Act lets SEBI regulate offer documents and advertisements.

Understand Listing of Securities and Section 17A of the SCRA

Raising money from the public and getting securities listed are two linked steps. Law controls both, so that investors get proper disclosure and a trading platform that is regulated.

Section 17A of the SCRA deals with securities of the nature in sub-clause (ie) of clause (h) of section 2. Section 2(h)(ie) covers certificates or instruments issued by a special purpose distinct entity. Your exam answer should say this clearly, and not suggest that 17A covers every security.

Under section 17A(1), such securities cannot be offered to the public or listed on a recognised stock exchange unless the issuer fulfils the eligibility criteria and other requirements specified by SEBI regulations. Section 31(2)(b) of the SCRA confirms that SEBI may make regulations on these eligibility criteria and requirements.

Section 11A of the SEBI Act is a wider power. It works for the protection of investors and is without prejudice to the Companies Act. SEBI may specify by regulations the matters relating to issue of capital and transfer of securities, and how companies disclose them. By general or special orders, it may prohibit a company from issuing a prospectus, offer document or advertisement soliciting money from the public for securities. It may also set conditions on which these may be issued if not prohibited. Section 11A(2) lets SEBI specify listing and transfer requirements, without prejudice to section 21 of the SCRA.

Section 11B adds the enforcement side. After an inquiry, SEBI may issue directions to a company in respect of matters in section 11A, where necessary in the interest of investors or orderly development of the securities market.

Key rules to remember

Section 17A(1): eligibility bar: No offer to public or listing of section 2(h)(ie) securities unless issuer meets SEBI's eligibility criteria and other requirements; Applies to securities of the nature in sub-clause (ie) of clause (h) of section 2.
Section 17A(2): listing application: Apply to one or more recognised stock exchanges BEFORE issuing the offer document; The issuer intends to offer the certificates or instruments to the public.
Section 17A(3): refund rule: Permission not granted or refused → repay all money forthwith; not repaid within 8 days → joint and several liability with interest at 15% per annum from the expiry of the eighth day; Liability falls on the issuer and every director or trustee in default. Public holidays under the Negotiable Instruments Act, 1881 are disregarded when counting the eighth day.
Section 17A(4): application of listing provisions: SCRA listing provisions for a public company's securities apply mutatis mutandis to the special purpose distinct entity; The issuer is the special purpose distinct entity.
Section 11A(1) SEBI Act: SEBI may (a) specify by regulations issue of capital, transfer of securities and disclosure manner; (b) by orders prohibit or set conditions for prospectus, offer document or advertisement; For the protection of investors, without prejudice to the Companies Act.
Section 11A(2) SEBI Act: SEBI may specify requirements for listing and transfer of securities; Without prejudice to section 21 of the SCRA.

How to solve Listing of Securities and Section 17A of the SCRA questions

Use this order for any question on section 17A or section 11A. It keeps your answer in the provision, facts, conclusion format.

1Identify the Act. Is the question about the SCRA (section 17A) or the SEBI Act (section 11A or 11B)?
2For 17A, check the security. Is it of the nature in section 2(h)(ie), issued by a special purpose distinct entity?
3State the rule: eligibility criteria and requirements specified by SEBI regulations must be met before public offer or listing.
4Check the timing. The listing application to one or more recognised stock exchanges must be made before the offer document is issued.
5If permission is refused or not granted, apply the refund rule: repay forthwith; after eight days, liability with 15% interest, jointly and severally.
6For 11A, identify SEBI's act: a regulation, or an order prohibiting or imposing conditions. Link it to investor protection.
7Write a clear conclusion that answers the exact question asked.

Quickest way: Three-line recall for 17A and 11A

When to use it: Use it when you have a short-note or a 5-mark question and little time.

17A: who (2(h)(ie) issuer), what (eligibility before offer or listing), apply for listing before the offer document.
17A(3): refusal means refund; eight days; 15% interest; issuer and directors or trustees jointly and severally liable.
11A: SEBI regulates issue disclosure by regulations, prohibits or conditions prospectus, offer document and advertisement by orders, and sets listing requirements.

Common mistakes in Listing of Securities and Section 17A of the SCRA

Saying section 17A applies to all securities of every company.
The heading mentions public issue and listing, so students assume it is general.
Fix: State that it applies to securities of the nature in section 2(h)(ie) issued by a special purpose distinct entity.
Saying the listing application is made after the offer document is issued.
Students think of listing as a post-issue step.
Fix: Section 17A(2) requires the application before issuing the offer document.
Quoting the refund period as 15 days or the interest as 8%.
Numbers get mixed up under pressure.
Fix: Remember eight days and fifteen per cent per annum, running from the expiry of the eighth day.
Saying only the issuer is liable for the refund.
Students overlook the wording on directors or trustees.
Fix: Write that the issuer and every director or trustee in default are jointly and severally liable.
Confusing section 11A with section 11B.
Both sit together in the SEBI Act and both involve companies.
Fix: 11A is the power to regulate or prohibit offer documents and advertisements. 11B is the power to issue directions and levy penalty after an inquiry.
Ignoring the Companies Act link in section 11A.
Students treat SEBI's power as standalone.
Fix: Mention that section 11A operates without prejudice to the Companies Act provisions.

Worked examples

Example 1

A special purpose distinct entity applied to a recognised stock exchange for listing its certificates, and issued the offer document. The exchange refused permission. The entity still holds the applicants' money. Advise on the legal position under section 17A of the SCRA.

Show the solution

Provision: the securities are of the nature in section 2(h)(ie), so section 17A applies. Under 17A(3), if listing permission is not granted or is refused, the issuer must forthwith repay all moneys received from applicants.
Facts: the exchange refused permission and the entity holds the money, so the duty to repay arises.
Consequence: if the money is not repaid within eight days after the issuer becomes liable, the issuer and every director or trustee in default become jointly and severally liable from the expiry of the eighth day.
Interest: they must repay with interest at 15% per annum. Public holidays under the Negotiable Instruments Act, 1881 are disregarded when counting the eighth day.

Answer: The entity must repay the money forthwith. If it fails within eight days, the issuer and defaulting directors or trustees are jointly and severally liable to repay with 15% interest per annum from the expiry of the eighth day.

Example 2

Explain the power of SEBI under section 11A of the SEBI Act, 1992 in relation to prospectus, offer document and advertisement.

Show the solution

Provision: section 11A allows SEBI, for the protection of investors and without prejudice to the Companies Act, to act on public issues.
By regulations, SEBI may specify the matters relating to issue of capital, transfer of securities and incidental matters, and the manner in which companies disclose them.
By general or special orders, SEBI may prohibit any company from issuing a prospectus, offer document or advertisement soliciting money from the public for issue of securities.
If not prohibited, SEBI may specify the conditions subject to which they may be issued.
Under 11A(2), SEBI may also specify listing and transfer requirements, without prejudice to section 21 of the SCRA.

Answer: Section 11A gives SEBI regulation-making power on issue of capital and disclosure, and order-making power to prohibit or impose conditions on a prospectus, offer document or advertisement, all for investor protection. It also lets SEBI specify listing and transfer requirements.

Exam tips

Write the section number and the Act together, for example section 17A of the SCRA and section 11A of the SEBI Act.
Learn the three numbers in 17A(3): eight days, fifteen per cent, and joint and several liability.
In a short note on 11A, cover both limbs: regulations and orders. Then add the listing power in 11A(2).
For case questions, end with a one-line conclusion that names who must act and what they must do.
Link section 11A to 11B when asked about enforcement: 11B allows directions to a company on matters in 11A.

Practice questions from Listing Obligations and Disclosure Requirements

Listing of Securities and Section 17A of the SCRA in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

CMA FinalListing, Contracts and Dealings in Securities under SCRA

Listing of Securities and Section 17A of the SCRA: frequently asked questions

What does section 17A of the SCRA deal with?

It deals with the public issue and listing of securities of the nature in section 2(h)(ie), issued by a special purpose distinct entity. Such securities need the issuer to meet SEBI's eligibility criteria and other requirements. The issuer must also apply for listing before issuing the offer document.

What happens if listing permission is refused under section 17A?

The issuer must forthwith repay all money received from applicants. If it is not repaid within eight days, the issuer and every director or trustee in default are jointly and severally liable. They must repay with interest at 15% per annum.

What is the difference between section 11A and section 11B of the SEBI Act?

Section 11A empowers SEBI to regulate issue of capital and disclosures, and to prohibit or condition prospectuses, offer documents and advertisements. Section 11B allows SEBI to issue directions and levy penalty after an inquiry. Directions can be to a company on matters in section 11A.

Does SEBI need the Companies Act to use section 11A?

No. Section 11A operates without prejudice to the Companies Act. This means SEBI's power sits alongside the company law provisions and does not replace them.