Notification Dated 10.06.2009
In exercise of the powers conferred by clause (ha) of sub-section (2) of section 30 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956), the Central Government hereby makes the following rules further to amend the Securities Contracts (Regulation) Rules, 1957, namely:-
1. Short title and commencement (1) These rules may be called the Securities Contracts (Regulation) (Amendment) Rules, 2008.
(2) They shall come into force on the date of their publication in the Official Gazette.
2. Insertion of rule 21 In the Securities Contracts (Regulation) Rules, 1957, after rule 20, the following rule shall be inserted, namely:-
“21. Delisting of securities. A recognized stock exchange may, without prejudice to any other action that may be taken under the Act or under any other law for the time being in force, delist any securities listed thereon on any of the following grounds in accordance with the regulations made by the Securities and Exchange Board of India, namely:-
(a) the company has incurred losses during the preceding three consecutive years and it has negative networth;
(b) trading in the securities of the company has remained suspended for a period of more than six months;
(c) the securities of the company have remained infrequently traded during the preceding three years;
(d) the company or any of its promoters or any of its director has been convicted for failure to comply with any of the provisions of the Act or the Securities and Exchange Board of India Act, 1992 or the Depositories Act, 1996 (22 of 1996) or rules, regulations, agreements made there under, as the case may be and awarded a penalty of not less than rupees one crore or imprisonment of not less than three years;
(e) the addresses of the company or any of its promoter or any of its directors, are not known or false addresses have been furnished or the company has changed its registered office in contravention of the provisions of the Companies Act, 1956 (1 of 1956); or
(f) shareholding of the company held by the public has come below the minimum level applicable to the company as per the listing agreement under the Act and the company has failed to raise public holding to the required level within the time specified by the recognized stock exchange :
Provided that no securities shall be delisted unless the company concerned has been given a reasonable opportunity of being heard.
(2) If the securities is delisted under clause (1),
(a) the company, promoter and director of the company shall be jointly and severally liable to purchase the outstanding securities from those holders who wish to sell them at a fair price determined in accordance with regulations made by Securities and Exchange Board of India, under the Act; and
(b) the said securities shall be delisted from all recognized stock exchanges.
(3) A recognized stock exchange may, on the request of the company, delist any securities listed thereon in accordance with the regulations made under the Act by Securities Exchange Board of India, subject to the following conditions, namely : –
(a) the securities of the company have been listed for a minimum period of three years on the recognized stock exchange;
(b) the delisting of such securities has been approved by the two-third of public shareholders; and
(c) the company, promoter and/ or the director of the company purchase the outstanding securities from those holders who wish to sell them at a price determined in accordance with regulations made by Securities and Exchange Board of India” under the Act :
Provided that the condition at (c) may be dispensed with by Securities and Exchange Board of India if the securities remain listed at least on the National Stock Exchange of India Limited . or the Bombay Stock Exchange Limited .”
[F. No. 1/14/SE/2005]
(Dr.K.P.Krishnan)
Joint Secretary to the Government of India
Note: Securities Contracts (Regulation) Rules, 1957 were published in the Gazette of India, Extraordinary, Part II, Section 3, page 619, dated 21.2.1957 vide SRO No. 576 dated the 21st of February,1957 and was subsequently amended by the amendment Notification —GSR 1096, dated 14.7.1967 published in the Gazette of India I, Part II section 3, sub section (i), w.e.f. 22.7.1967, G.S.R 685, dated 3.6.1972 published in the Gazette of India, Part II, section 3, sub section (i) w.e.f. 10.6.1972, page 1556, G.S.R. to S.R. 959, dated 8.8.1972, w.e.f. 12.8.1972, G.S.R. 2641, dated 1.11.1975 w.e.f. 8.11.1975, GSR 1083 dated 11.11.1985, w.e.f. 23.11.1985, GSR 1070(E) dated 15.11.1988, GSR 666(E) dated 20.7.1987, G.S.R. 870 (E) dated 13.11.1992, GSR 617 (E) dated 20.9.1993 published in the Gazette of India Extraordinary Part II, section 3, sub section (i) w.e.f. 20.9.1993, GSR 749 (E) dated 12.10.1994, published in the Gazette of India, Extraordinary Part II, section 3, sub-section (i), GSR 790(E) , dated 7.11.1994, GSR 121(E) dated 9.3.1995, published in the Gazette of India, Extraordinary, Part II, section 3, sub section (i) w.e.f. 9.3.1995, GSR 291 (E), dated 27.3.1995, published in the Gazette of India, Extraordinary, Part II, section 3, sub section (i), GSR 581 (E) dated 23.12.1996 published in the Gazette of India, Extraordinary, Part II, section 3, sub section (i) w.e.f. 23.12.1996, G.S.R..654 (E) dated 8.8.2000, published in the Gazette of India, Extraordinary, Part II, Section 3, subsection (i), G.S.R. 655(E), dated 8.8.2000, published in the Gazette of India, Extraordinary, Part II, section 3, sub-section (i), G.S.R. 415 (E), dated 7.6.2001, published in the Gazette of India, Extraordinary Part II, section 3, sub-section (i) dated 7.6.2001, and G.S.R. 696 (E), dated 28.8.2003, published in the Gazette of India, Extraordinary Part II, section 3, sub-section (i) dated 28.8.2003.
