*Ministry of Finance
Notification No. G.S.R. 520(E). Dtd. 30th July, 2021
The MoF has notified a new set of rules to add sub-rule (6) in rule 19A of the Securities Contracts (Regulation) Rules, 1957 to provide exemption to listed PSUs.
The notification shall come into force on the date of its publication in the Official Gazette.
Rule 19A of the Securities Contracts (Regulation) Rules, 1957 provides for maintenance of minimum public shareholding and its attainment within a specified period.
Extract of Rule 19A:
1. Every listed company (other than PSU) shall maintain public shareholding of at least 25%. Any listed company which has public shareholding below 25% on the commencement of the Securities Contracts (Regulation) (Second Amendment) Rules, 2018, shall increase its public shareholding to at least 25%, within a period of 3 years from the date of such commencement, in the manner specified by the SEBI. A company whose securities have been listed pursuant to an offer and allotment made to public in terms of rule 19(2)(b), shall maintain minimum 25% public shareholding from the date on which the public shareholding in the company reaches the level of 25% in terms of said sub-clause.
2. Where the public shareholding in a listed company falls below 25% at any time, such company shall bring the public shareholding to 25% within a maximum period of 12 months from the date of such fall in the manner specified by the SEBI. Every listed PSU whose public shareholding falls below 25% at any time after the commencement of the Securities Contracts (Regulation) (Second Amendment) Rules, 2018, shall increase its public shareholding to at least 25%, within a period of 2 years from such fall, in the manner specified by the SEBI.
3. omitted.
4. Where the public shareholding in a listed company falls below 25% in consequence to the Securities Contracts (Regulation) (Amendment) Rules, 2015, such company shall increase its public shareholding to at least 25% in the manner specified by the SEBI within a period of 3 years, as the case may be, from the date of notification of
i. The Depository Receipts Scheme, 2014 in cases where the public shareholding falls below 25% as a result of such scheme.
ii. The SEBI (Share Based Employee Benefits) Regulations, 2014 in cases where the public shareholding falls below 25% as a result of such regulations.
5. Where the public shareholding in a listed company falls below 25%, as a result of implementation of the resolution plan approved under section 31 of the IBC, 2016, such company shall bring the public shareholding to 25% within a maximum period of 3 years from the date of such fall, in the manner specified by the SEBI. If the public shareholding falls below 10%, the same shall be increased to at least 10%, within a maximum period of 12 months from the date of such fall, in the manner specified by the SEBI. Provided further that, 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, 2016.
6. Notwithstanding anything contained in sub-rules (1) to (5), the Central Government may, in the public interest, exempt any listed public sector company from any or all of the provisions of this rule.
Disclaimer: The author is based in Jabalpur and is a Practicing Company Secretary dealing in Corporate, Legal & Taxation services. The information contained in this write up, as provided by the author, is to provide a general guidance to the intended user. The information should not be used as a substitute for specific consultations. Author recommends that professional advice is sought before taking any action on specific issues.
The author can also be reached at cstanveersaluja@gmail.com.
To join our WhatsApp Group, CORP-DATES, drop a text on +917000156796.
Author Bio
