SEBI has notified Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) (Second Amendment) Regulations, 2021 to amend the existing Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2018 vide Notification No. SEBI/LAD-NRO/GN/2021/44 dated Dtd. 13th August, 2021 which shall come into force on the date of its publication in the Official Gazette. The amendments relate to Regulation 19- Eligibility for acquiring or holding shares.

Sr. No. Amendment Comments
1 Omission: Regulation 19(1) second proviso

the word listed shall be omitted.

Self-explanatory.

No person shall, directly or indirectly, acquire or hold any equity shares or voting rights of a recognised stock exchange or recognized clearing corporation unless he is a fit and proper person:

Provided that the onus shall be on the recognised stock exchange/recognised clearing corporation to ensure that all its shareholders are fit and proper persons:

Provided further that such a requirement to ensure that all its shareholders are fit and proper persons shall not be applicable to a listed recognized stock exchange for shareholding of a person who directly or indirectly, acquires or holds less than two percent equity shares or voting rights of such listed recognized stock exchange.

2 Omission: Regulation 19(2)

Omitted provision:

Any person(s) who acquires equity shares or voting rights, in a recognised stock exchange or recognized clearing corporation, directly or indirectly, either individually or together with persons acting in concert, that entitles the person(s) so acquiring to exercise voting rights of two percent upto five percent, shall seek approval of the Board within fifteen days of such acquisition.

The requirement of prior approval of Board in case of acquiring voting rights from 2% to 5% is removed.
3 Omission: Regulation 19(4)

the words and symbol “sub-regulation (2) or” shall be omitted.

4 Omission: Regulation 19(6)

Omitted provision:

If approval under sub-regulation (2) is not granted by the Board to any person, such person shall forthwith divest his entire shareholding in the depository.

As sub-section (2) is removed, sub-section (6) holds no relevance, hence omitted.

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SECURITIES AND EXCHANGE BOARD OF INDIA

NOTIFICATION

Mumbai, the 13th August, 2021

SECURITIES CONTRACTS (REGULATION) (STOCK EXCHANGES AND CLEARING CORPORATIONS) (SECOND AMENDMENT) REGULATIONS, 2021

No. SEBI/LAD-NRO/GN/2021/44.—In exercise of the powers conferred by sections 4, 8A and 31 of the Securities Contracts (Regulation) Act, 1956, read with sections 11 and 30 of the Securities and Exchange Board of India Act, 1992, the Securities and Exchange Board of India hereby makes the following regulations to further amend the Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2018, namely:—

1. These regulations may be called the Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) (Second Amendment) Regulations, 2021.

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

3. In the Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2018, –

I. In regulation 19,

i. in the second proviso to sub-regulation (1), the word “listed” shall be omitted.

ii. sub-regulation (2) shall be omitted.

iii. in sub-regulation (4), the words and symbol “sub-regulation (2) or” shall be omitted.

iv. sub-regulation (6) shall be omitted.

AJAY TYAGI, Chairman

[ADVT.-III/4/Exty./201/2021-22]

Footnote:

1. The Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2018 were published in the Gazette of India on 3rd October 2018 vide No. SEBI/LAD-NRO/GN/2018/41.

2. The Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) Regulations, 2018 were subsequently amended on –

(a) 4th June, 2019, by the Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) (Amendment) Regulations, 2019 vide No. SEBI/LAD-NRO/GN/2019/21.

(b) 17th April, 2020, by the Securities and Exchange Board of India (Regulatory Sandbox) (Amendment) Regulations, 2020 vide No. SEBI/LAD-NRO/GN/2020/10.

(c) 8th October, 2020, by the Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) (Amendment) Regulations, 2020 vide No. SEBI/LAD-NRO/GN/2020/32.

(d) 23rd March, 2021, by the Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) (Amendment) Regulations, 2021 vide No. SEBI/LAD-NRO/GN/2021/12.

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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 [email protected]

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