As per Regulation 38 of LODR, 2015 companies has to maintain Minimum Public Shareholding (MPS) in accordance with the methods prescribed in Circular SEBI circular No. CIR/CFD/CMD/14/2015 dated November 30, 2015.
Reg. 97 (1) of the Listing Reg. mandates recognized stock exchange to monitor the compliance of listed company with the provisions of the LODR. Thereafter, SEBI prescribes the procedures that have to be followed by the recognised stock exchange with respect to the non- compliant list entities, their promoters and director. SEBI directs stock exchanges to review whether listed company is in compliance with MPS requirement based on shareholding pattern/ other filings. In case of the non- compliance, the stock exchange is required to issue notice within 15 days from the date of observation thereafter intimates about all actions taken/ being taken as per the circular.
SEBI instructs stock exchanges to periodically disclose the name, amount of fine imposed, freezing of shares held by the promoters and promoter group, status of compliance including the details regarding fine paid by the entity and the other actions taken against the entity.
1 Non-Compliance of the Maintaining the MPS may result in the the following consequences;
2. If the Non-Compliance continues to be for more than one year;
The recognized stock exchange may also consider compulsory Delisting of the non-compliant listed entity.
Amount of Fines shall be credited to the “Investor Protection Fund” of respective Stock Exchange, if fine not so paid by entity exchange may initiate appropriate action.
For the more reference can go through the regulation 38, 97, 98, 99 & 101 of LODR, 2015.
Reference- CFD/CMD/CIR/P/2017/115 OCTOBER 10, 2017
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