PRESS RELEASE NO.93/2011, DATED 22-6-2011
In order to moderate sharp and destabilizing price movements in shares of companies, to encourage better price discovery and to increase transparency in securities market SEBI had issued a circular on “trading rules and shareholding in dematerialized mode” vide Cir. No. SEBI/Cir/ISD/1/2010, dated September 2, 2010. The said circular inter alia mandated securities of companies to be traded in normal segment, if and only if, the company has achieved at least 50% non-promoter shareholding in dematerialized form and maintained the same on a continuous basis.
In order to further promote dematerialization of securities, to encourage orderly development of the securities market and to improve transparency in the dealings of shares by promoters including pledge / usage as collateral, SEBI in consultation with Stock Exchanges, has decided that the securities of companies shall be traded in the normal segment of the exchange if and only if, the company has achieved 100% of promoters and promoter group’s shareholding in dematerialized form latest by the quarter ended September 2011 as reported to the stock exchanges. In all cases, wherein the companies do not satisfy the above criteria, the trading in securities of such companies shall take place in trade for trade segment.
The circular No Cir/ISD/3/2011, dated June 17, 2011 issued in this regard is available on SEBI website at www.sebi.gov.in under the head ‘legal framework’.