COMPLIANCE WITH LISTING AGREEMENT Presented by Gopalkrishnan Iyer BOMBAY STOCK EXCHANGE LTD.
Listing Listing indicates recognition of the capital admitted for dealings on the Exchange Listing of securities is not mandatory for admission to dealings on the Exchange Admission to dealings possible through • Listing of securities • Inclusion in permitted category Listing of equity shares not mandatory for listing of debt instruments to give it a listing status on the Exchange. BOMBAY STOCK EXCHANGE LTD.
Legal Provisions Securities Contracts (Regulation) Act, 1956 • Sec 21 – Execution of listing agreement mandatory for listing of securities Securities Contracts (Regulation) Rules, 1957 • Rule 19 – Requirements with respect to listing of securities on the Exchange Rules, Bye-laws, Regulations of BSE • Reg 2 – Listing Agreement BOMBAY STOCK EXCHANGE LTD.
Other points Amendment to listing agreement can be carried out • By the Exchange under its Rules, Bye-laws, Regulations • As per the directions of SEBI Listing Agreement provisions will prevail for a listed entity BOMBAY STOCK EXCHANGE LTD.
Listing Agreement • Compliances are • Time based • Event based • No power to the Exchange for relaxation of time limits specified for compliance under the respective clause • Only critical clauses are monitored BOMBAY STOCK EXCHANGE LTD.
Listing Agreement - Compliances Clause 16: Fixation of Book Closure / Record Date • Adequate advance notice to the stock exchange Clause 19: Intimation of Board Meeting • Adequate advance notice to the stock exchange for purposes like buyback of securities, dividend, rights, issue of convertible debentures • Bonus if it forms part of the agenda • Declaration of dividend atleast 5 days prior to the start of the BC/ RD Clause 20: Outcome of the Board Meeting Clause 23 (a): Re-issue of forfeited shares to the existing shareholders, to the extent possible BOMBAY STOCK EXCHANGE LTD.
Contd... Clause 23 (e) and (f): relating to period for the rights issue to be kept open and allotment in the rights issue – provisions of SEBI (Disclosure and Investor Protection) Guidelines, 2000 will be enforced Clause 24 (a) : All new securities issued by the company have to be listed on the Exchange • Applicable with respect to securities already listed on the Exchange • Three stage approval process – In-principle approval, Listing approval and Trading approval Clause 24(f) : Prior permission for any scheme to be filed in the Court for scheme of arrangement or reduction Clause 24(g) : Compliance with securities laws Clause 24(h) : Disclosures in the explanatory statement to the notice u/s 393 of Companies Act, 1956 BOMBAY STOCK EXCHANGE LTD. BOMBAY STOCK EXCHANGE LTD.
Contd... Clause 31 : Notices/ circulars to the shareholders, Annual Report, proceedings at AGM/ EGM to be filed the Exchange Clause 32 : Name change would require approval of the Exchange. Cash Flow Statement as part of annual report Disclosures with respect to RPTs, Consolidated Financial Statement, Disclosures w.r.t. loans/ advances and investments Clause 35 : Shareholding Pattern • Filing in the specified format within 21 days from the end of the calendar quarter • Disclosures alongwith annexures Clause 36: Material and Price Sensitive Information • Onus on companies to determine material and price sensitive information • Items included are not exhaustive Clause 38(a): Payment of Annual Listing fees BOMBAY STOCK EXCHANGE LTD. BOMBAY STOCK EXCHANGE LTD.
Contd... Clause 40A: Maintenance of minimum public shareholding on a continuous basis • Filing under clause 35 shall be the basis of monitoring • Onus on company where exemption is applicable • Prior approval of the Exchange required for a non-compliant company to adopt modes other than FPOs and Offer for Sale for complying with the requirement Clause 41: Un-audited / Audited Quarterly Results, Audited Annual Results • Intimation of Board Meeting date atleast 7 clear calendar days in advance • Filing within 1 month from the end of the quarter and in case of last quarter within 3 months from the end of the financial year (option exercisesd) in the format specified • Filing of Limited Review Report within 2 months from the end of the quarter where UFR is filed • Variation of 10% or more or Rs. 10 lacs in net profits and/ or extraordinary/ exceptional items between UFR and Annual Audited Results BOMBAY STOCK EXCHANGE LTD. BOMBAY STOCK EXCHANGE LTD.
Contd... Clause 47: Signing of MOU with RTA, Appointment of Company Secretary as Compliance Officer Half yearly compliance certificate within 1 month from the end of the half year Email id for investor grievances Clause 49: Corporate Governance • Filing of compliance report within 1 month from the end of the quarter • Corporate Governance Report, Auditors Report and Management Discussion and Analysis Report to form part of Annual Report • Composition of Board, Audit Committee and Shareholders and Investor Grievance Committee • Gap between board meetings should not exceed 4 months BOMBAY STOCK EXCHANGE LTD. BOMBAY STOCK EXCHANGE LTD.
Penal provisions • Warning by the Exchange • Suspension in the trading of securities • Delisting of securities • Reference to SEBI u/s 23E of SCRA for adjudication proceedings where maximum fine is Rs. 25 crores • Filing for prosecution u/s 23(2) of SCRA where penalty could be upto Rs. 25 crores and/ or imprisonment for 10 years BOMBAY STOCK EXCHANGE LTD.
Other Compliances • Filings under Takeover and Insider Trading Regulations • Filing of Secretarial Audit Report Power to take action for non-compliance rests with SEBI BOMBAY STOCK EXCHANGE LTD.
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