prpri Securities Contracts (Regulation) (Amendment) Rules, 2021 Securities Contracts (Regulation) (Amendment) Rules, 2021

The Ministry of Finance has notified a new set of rules, Securities Contracts (Regulation) (Amendment) Rules, 2021 vide Notification No. G.S.R. 423(E) Dtd. 18th June, 2021, to amend the Securities Contracts (Regulation) Rules, 1957 which shall come into force on the date of its publication in the Official Gazette.

a. Amendment in Rule 19(2)(b)(iii):

“Insertion of words but less than or equal to ₹1 lakh crore after the words ₹4 thousand crore.”

Effect: A Company which is desirous of getting its securities listed on a Stock Exchange shall offer and allot to public in terms of an offer document at least 10% of “each class or kind of equity shares or debentures convertible into equity shares” (securities) issued by the company, if the post issue capital of the company calculated at offer price is above ₹4 thousand crore but less than or equal to ₹1 lakh crore.

b. Insertion of sub-clause (4) in Rule 19(2)(b):

Effect: A Company which is desirous of getting its securities listed on a Stock Exchange shall offer and allot to public in terms of an offer document at least such percentage of securities issued by the company equivalent to the value of ₹5 thousand crore and at least 5% of each such securities issued by the company, if the post issue capital of the company calculated at offer price is above ₹1 lakh crore. Further, the Company shall increase its public shareholding to at least 10% within a period of 2 years and at least 25% within a period of 5 years from the date of listing of the securities.

c. Amendment in Rule 19A(5):

Substitution of word eighteen with twelve in the proviso.

Effect: In case of acquisition of a listed co. under Corporate Insolvency Resolution Process, if the public shareholding falls below 10% then the same shall be increased to 10% within 12 months from the date of such shortfall.

d. Insertion of proviso in Rule 19A(5):

Effect: Every listed company shall maintain public shareholding of at least 5% as a result of implementation of the resolution plan approved under section 31 of the IBC.

MINISTRY OF FINANCE
(Department of Economic Affairs)
NOTIFICATION
New Delhi, the 18th June, 2021

G.S.R. 423(E).—In exercise of the powers conferred by 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, 2021.

(2) They shall come into force on the date of their publication in the Official Gazette.

2. In the Securities Contracts (Regulation) Rules, 1957, in rule 19, in sub-rule (2), in clause (b),-

(1) in sub-clause (iii), –

(i) after the words ―four thousand crore rupees”, the words ”but less than or equal to one lakh crore rupees” shall be inserted;

(ii) after sub-clause (iii) and before the provisos, the following shall be inserted, namely –

”(iv) at least such percentage of each class or kind of equity shares or debentures convertible into equity shares issued by the company equivalent to the value of five thousand crore rupees and at least five per cent of each such class or kind of equity shares or debenture convertible into equity shares issued by the company, if the post issue capital of the company calculated at offer price is above one lakh crore rupees;

Provided that the company referred to in this sub-clause (iv) shall increase its public shareholding to at least ten per cent within a period of two years and at least twenty-five per cent. within a period of five years, from the date of listing of the securities, in the manner specified by the Securities and Exchange Board of India; ;

(iii) in the third proviso, after the words ―applicant company‖, the words ―referred to in clause (b)‖ shall b inserted;

(2) in rule 19A, in sub-rule (5), –

(i) in the proviso, for the word ―eighteen‖, the word ―twelve‖ shall be substituted;

(ii) the following proviso shall be inserted, namely, –

”Provided further that, every listed company shall maintain public shareholding of at least five per cent. as a result of implementation of the resolution plan approved under section 31 of the Insolvency and Bankruptcy Code, 2016.”.

[F. No. 5/35/CM/2006-Volume III]

A. M. BAJAJ, Addl. Secy. (Financial Markets)

Note: The principal rules were published in the Gazette of India, Extraordinary, Part II, Section 3 vide number S.R.O. 576, dated the 21st February, 1957 and subsequently amended vide numbers as under:

(1) G.S.R 1096, dated the 14th July, 1967;

(2) G.S.R. 685, dated the 3rd June, 1972;

(3) G.S.R. 959, dated the 8th August, 1972;

(4) G.S.R. 2641, dated the 1st November, 1975;

(5) G.S.R. 1083, dated the 11th November, 1985;

(6) G.S.R. 666(E), dated the 20th July, 1987;

(7) G.S.R. 1070(E), dated the 15th November, 1988;

(8) G.S.R. 870(E), dated the 13th November, 1992;

(9) G.S.R. 617(E), dated the 20th September, 1993

(10) G.S.R. 749(E), dated the 12th October, 1994;

(11) G.S.R. 790(E), dated the 7th November, 1994;

(12) G.S.R. 121(E), dated the 9th March, 1995;

(13) G.S.R.291(E), dated the 27th March, 1995;

(14) G.S.R. 581(E), dated the 23rd December, 1996;

(15) G.S.R. 654(E), dated the 8th August, 2000;

(16) G.S.R. 655(E), dated the 8th August, 2000;

(17) G.S.R. 415(E), dated the 7th June, 2001;

(18) G.S.R. 696(E), dated the 28th August, 2003;

(19) G.S.R. 395(E), dated the 10th June, 2009;

(20) G.S.R. 469(E), dated the 4th June, 2010;

(21) G.S.R. 662(E), dated the 9th August, 2010;

(22) G.S.R.705 (E), dated the 25th October, 2013;

(23) G.S.R. 21(E), dated the 16th January, 2014;

(24) G.S.R.611 (E), dated the 22nd August, 2014;

(25) G.S.R.682 (E), dated the 22ndSeptember, 2014;

(26) GSR. 819(E), dated the 19th November, 2014;

(27) G.S.R. 125(E), dated the 26th February, 2015;

(28) G.S.R. 268(E), dated the 20th March, 2017;

(29) G.S.R. 664(E), dated the 28th June, 2017;

(30) G.S.R. 822(E), dated the 3rd July, 2017;

(31) G.S.R 675(E), dated the 25th July, 2018;

(32) G.S.R. 738(E), dated the 3rd August, 2018;

(33) G.S.R. 189(E), dated the 19th March, 2020, and

G.S.R. 485(E), dated the 31st July, 2020.

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