Circular, CIR/MRD/DSA/18/2014, dated 22nd May, 2014
Companies exclusively listed on
De-recognized/Non-operational Stock Exchanges.
1. SEBI vide circular dated May 30,
2012 (Exit Circular) issued guidelines in respect of exit options to stock
exchanges. In terms of these guidelines, if the stock exchange is not able to
achieve the prescribed turnover of Rs 1000 Crore on continuous basis or does
not apply for voluntary surrender of recognition and exit before the expiry of
two years from the date of SEBI circular dated May 30, 2012, SEBI shall proceed
with compulsory de-recognition and exit of the stock exchanges, in terms of the
conditions as may be specified by SEBI.
Applicability
2. The provisions of this Circular
are applicable for all those stock exchanges which have not achieved the
prescribed turnover of Rs. 1000 Crore on continuous basis on or before May 30,
2014.
Directions to Stock Exchanges to deal with companies
exclusively listed on non-operational stock exchanges
3. In line with the above
provisions, the following shall be applicable:-
i. The exclusively listed companies
of such non-compliant stock exchanges may opt for listing in nation-wide
exchanges after complying with listing norms of main board or the diluted
listing norms, if any, on or before the exit of the exchange, either on
voluntary or compulsory basis. Nation-wide stock exchanges shall facilitate the
listing of these companies on priority basis in a time bound manner. For this
purpose, these nation-wide stock exchanges shall immediately create a separate
dedicated cell to expedite processing the listing requests from such companies.
ii. Such exclusively listed
companies may also opt for voluntary delisting before the de-recognition of the
stock exchanges by following the existing delisting norms of SEBI in terms of
SEBI (Delisting of Equity Shares) Regulations, 2009. Nation-wide stock
exchanges shall provide a platform to these companies to facilitate reverse
book building for voluntary delisting using their platform.
iii. With a view to facilitate
voluntary delisting, if they so desire, it is clarified that for such companies
as referred to at Para 2(ii) above, the requirements of ‘Minimum Public
Shareholding’ prescribed in Rules 19(2)(b) and 19A of the Securities Contracts
(Regulation) Rules, 1957 and Clause 40A of the Listing Agreement, shall not be
applicable.
iv. In case of companies exclusively
listed in the non-operational stock exchanges that are not traceable or where
the data available is more than three years old, the process of inclusion in
list of companies identified as 'Vanishing' (maintained by Ministry of
Corporate Affairs) may be initiated by the respective stock exchanges.
v. As per the 'Exit Circular' the
exclusively listed companies, which fail to obtain listing on any other stock
exchange, which do not voluntary delist or which are not considered as
'Vanishing companies', will cease to be listed company and will be moved to the
dissemination board by the existing stock exchange. It shall be the
responsibility of the exchanges which are being derecognized either on
voluntary or compulsory basis, to place their exclusively listed companies on
the dissemination board. These exchanges shall ensure that the database of the
exclusively listed company is transferred to SEBI and to those stock exchanges
on whose dissemination board, the shares of these companies are available.
4. This circular is issued in
exercise of powers conferred under Section 11 (1) and 11(2) (j) of the
Securities and Exchange Board of India Act, 1992, to protect the interests of
investors in securities and to promote the development of, and to regulate the
securities market.
5. This circular is available on
SEBI website at www.sebi.gov.in.
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