Clearing the hurdles for the listing of Indian stock exchanges, capital market regulator Securities and Exchange Board of India (Sebi) on Monday said that a listed stock exchange will have to maintain 51% public shareholding, while ownership of trading members, associates and agents in the entity do not exceed 49%. The representations were part of the Sebi’s board meeting held in Mumbai.
The regulator also said that stock exchanges would have to ensure that each shareholder must meet the ‘fit and proper’ status. Each shareholder will be required to make declaration to this effect at the time of making application during its listing and public issue. Sebi will also monitor the 2%, 5% and 15% shareholding limits through the depository mechanism, Sebi added.
“Stock exchanges shall be classified as ‘infrastructure company’ under SEBI (ICDR) Regulations, 2009. In order to effectively implement the provisions of listing of its associates on listed stock exchanges, the definition of associates is being appropriately amended,” Sebi noted in its press release following the board meeting.
In a 10-point agenda, Sebi also proposed new norms for issuance and listing of green bonds. The board also relaxed norms for delisting of small companies and separately asked listed companies to give exit options to dissenting shareholders upon any change in original public offer objectives.
The move follows a provision in the Companies Act, 2013 in this regard, wherein it was said that such an exit option needs to be given as per the regulations to be specified by Sebi.
Accordingly, Sebi has now decided to put in place a suitable regulatory framework.
As part of efforts to protect the interests of investors and prevent them from falling prey to dubious investment schemes, the new Companies Law provides for various provisions. One of the provisions is with regard to altering the purpose of raising money from investors once such funds have been garnered by a company.
Under the Companies Act, 2013, changes in memorandum of a firm – as mentioned prior to raising funds – can be amended only by way of a special resolution passed by the concerned shareholders.
A company, which has raised money from public through prospectus and still has any unutilised amount out of the money so raised, cannot change its objectives for which it raised the funds through prospectus unless a special resolution is passed.
Besides, dissenting shareholders or those who are not satisfied with the changes, would be provided an exit option. (With PTI inputs)
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