25% public holding must for all listed companies : Govt

The Government has made amendments to the Securities Contracts (Regulation) Rules

The salient features of the amendment are as follows:

a)      The minimum threshold level of public holding will be 25% for all listed companies.

b)      Existing listed companies having less than 25% public holding have to reach the  minimum 25% level by an annual  addition  of  not less than 5% to public holding.

c)       For new listing, if the post issue capital of the company calculated at offer price is more than Rs. 4000 crore, the company may be allowed to go public with 10% public shareholding and comply with the 25% public shareholding requirement by increasing its public shareholding by at least 5% per annum. 

d)      For companies whose draft offer document is pending with Securities and Exchange Board of India on or before these amendments are required to comply with 25% public shareholding requirement by increasing its public shareholding by at least 5% per annum, irrespective of the amount of post issue capital of the company calculated at offer price. 

e)      A company may increase its public shareholding by less than 5% in a year if such increase brings its public shareholding to the level of 25% in that year.

f)        The requirement for continuous listing will be the same as the conditions for initial listing.

g)      Every listed company shall maintain public shareholding of at least 25%.  If 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.

    The Securities Contracts (Regulation) Rules 1957 provide for the requirements which have to be satisfied by companies for the purpose of getting their securities listed on any stock exchange in India.  A dispersed shareholding structure is essential for the sustenance of a continuous market for listed securities to provide liquidity to the investors and to discover fair prices. Further, the larger the number of shareholders, the less is the scope for price manipulation. Accordingly, the Finance Minister in his Budget speech for 2009-10, inter- alia, proposed to raise the threshold for non- promoter, public shareholding for all listed companies. To implement the Budget announcement the Securities Contracts (Regulation) (Amendment) Rules, 2010 have been notified today. 

Source -pib.nic.in

Do inefficient stock markets drive bad corporate governance? | vox - Research-based policy analysis and commentary from leading economists

Do inefficient stock markets drive bad corporate governance? | vox - Research-based policy analysis and commentary from leading economists

NSE bans Pyramid Saimira from trading from June 1 for non - Filling of quarterly corporate governance report

National stock exchange bans Pyramid Saimira from trading from June 1 for non - Filling of quarterly corporate governance report.

Clause 49 of the listing agreement, which is an umbrella regulation on corporate governance norms, mandates companies to submit a quarterly report, signed either by the compliance officer or the CEO, to the stock exchange within 15 days from the close of a quarter.

According to the Exchange public announcement, the company failed to respond to its notice for non-compliance with provisions of listing agreement.

SEBI issued Model Listing Agreement for listing on SME Exchange

Securities Exchange Board of India issued model listing agreement for listing securities on SME exchange 

In recognition of the need for making finance available to small and medium enterprises, SEBI has decided to encourage promotion of dedicated exchanges and/or dedicated platforms of the exchanges for listing and trading of securities issued by Small and Medium Enterprises (“SME”). Consequently, SEBI amended SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 (“SEBI (ICDR) Regulations”) by inserting a Chapter XA on “Issue of specified securities by small and medium enterprises”, through notification dated April 13, 2010. In continuation of the same and to facilitate listing of specified securities in the SME exchange

Certain relaxations are provided to the issuers whose securities are listed on SME exchange in comparison to the listing requirements in Main Board, which inter-alia include the following:

a)Companies listed on the SME exchange may send to their shareholders, a statement containing the salient features of all the documents, as prescribed in sub-clause (iv) of clause (b) of proviso to section 219 of the Companies Act, 1956, instead of sending a full Annual Report;

b. Periodical financial results may be submitted on “half yearly basis”, instead of “quarterly basis” and

c. SMEs need not publish their financial results, as required in the Main Board and can make it available on their website.

draft of SME listing available at http://www.sebi.gov.in/circulars/2010/circfddil062010.pdf

83 companies listed in BSE and 47 companies listed in NSE which have not fully complied with clause 49 of the Listing Agreement.

The Government has said that the Companies Act, 1956 does not provide for appointment of Independent Directors. But, as per clause 49 of the Listing Agreement, all the listed companies are required to appoint Independent Directors.

Giving this information in written reply to a question in the Lok Sabha today, the Minsiter for Corporate Affairs, Shri Salman Khurshid told the House that as per the information received from Securities Exchange Board of India (SEBI), there are 83 companies listed in BSE and 47 companies listed in NSE which have not fully complied with clause 49 of the Listing Agreement. 

New SEBI rule treat small and institutional investors on par in initial public offerings

A new directive from the market regulator Sebi is coming to effect from  Monday 3rd may 2010 as per which institutional investors will have to pay upfront 100 per cent money in primary issues, just like the retail investors. Earlier, QIBs were required to put only 10 per cent as margin money in public issues, while retail investors were putting the entire 100 per cent along with the applications.

Another move of the regulator coming into effect 3rd may is that the listing time for companies after the completion the initial public offer has been halved to 12 days.

This will help investors to get there refund faster. 

Questionnaire for small/retail investor survey http://bcomquest.0fees.net/

This survey is part of my  research on Corporate Governance disclosure practices in India.

With this survey i intend to find out awareness of small/retail investor on corporate governance and disclosure  practices of listed companies  in India  (clause 49 of Listing agreement )

my request to  investors to click on the following link and answer my small  questionnaire.

thank you

http://bcomquest.0fees.net/

BSE finds Compact Disc India non- compliant with SEBI Listing Agreement - Moneylife: Personal Finance Magazine

BSE finds Compact Disc India non- compliant with SEBI Listing Agreement - Moneylife: Personal Finance Magazine

Corporate governance code for Unlisted companies in India

The government on Wednesday said that the Securities and Exchange Board of India( SEBI ) guidelines which require listed companies to meet corporate governance norms for best practices in management may now be extended to unlisted companies as well.

"We are harmonising... The appropriate best practices that are seen in Clause 49 (of Sebi’s listing agreement) will have to be brought in the new companies bill,” corporate affairs minister Salman Khursheed said. Best practice standards have to be imposed on everyone appropriately, Khursheed told reporters on the sidelines of an Assocham event. “But the compliance cost has to be kept in mind, looking at different levels and sizes of the companies,” he said.

source  -www.telegraphindia.com

SEBI to distribute Rs. 23.28 crores to 12,74,736 unsuccessful (Retail Investor) IPO Applicants

Finance minister, Shri Pranab Mukherjee says more concerted steps are needed in fully addressing investor protection issues given its magnitude.

" text of the Finance Minister’s speech at SEBI foundation day on 12th April 2010"

“It gives me great pleasure to be here on the SEBI Foundation Day which is aptly being commemorated in the presence of representatives from the community of retail investors. This event underscores the importance of investor protection even when we strive to develop the securities market.

I am of the view that investor protection should remain the cornerstone of any developmental and regulatory steps taken for the development of the securities market. Given the income disparity, in addition to the large institutional and individual investors we have small retail investors in the Indian securities market. It becomes incumbent not only for the Government but also for the regulator to safeguard the interests of these retail investors who typically invest their hard earned savings. Besides this is required to encourage retail participation for ensuring greater depth of the market and promote the inclusive growth strategy of the Government.

Investor protection has always been the foremost concern and priority for the Government of India ever since retail-focused capital markets development was promoted post 1991 reforms. With this goal in mind, in December 2006, my predecessor had informed Hon’ble Members of Parliament that SEBI has been directed to reallocate the shares from the persons who illegally benefited from allotments in various IPOs to such retail investors who were denied allocation of shares in 21 IPOs during 2003-05.

The following years witnessed setting up of a Committee under the chairmanship of Justice D P Wadhwa, (Former Judge, Supreme Court of India) to advise on the procedure of identification of persons who might have been deprived on account of such IPO irregularities and the manner in which reallocation of shares to such persons should take place.

I am happy to note that towards implementing the recommendations of the Wadhwa Committee, SEBI has appointed an Administrator in February 2010 who has since identified around twelve lakh seventy four thousand (12,74,736) unsuccessful IPO applicants to whom, in the first occasion, an amount of Rs.23.28 cr. Approx. is proposed to be disbursed.

Several initiatives have been taken towards improving the integrity and efficiency in IPO process. Mandatory declaration of PAN number, facility of electronic transfer of funds for public issue refunds, regulations on book-building IPO norms, strengthening of disclosure norms by promoters, reduction in the timeline between closing date of subscription of an issue and listing etc are some of them.

Further SEBI’s decision to make mutual fund advisers the agents of customers rather that of the company whose products they sell would go a long way in protecting small investors. I believe India could set global standards by following a no load plus fee model for the entire financial sector to ensure a fair deal for all market participants. I hope all financial sector regulators would work towards this goal. SEBI has also been active in taking timely and effective measures to deal with the wrong doers. However, despite many of these efforts more concerted steps are needed in fully addressing investor protection issues given its magnitude.

Given the strength of its infrastructure and a robust regulatory regime, the Indian securities market today is among the most attractive investment destinations in the world. Further, retail participation of Indian investors in the securities markets, directly and through mutual funds, has been increasing significantly over these years.

Investor education is integral for ensuring investor protection. Given the low level of awareness among the investors, it is very important and highly indispensable that investors’ education and awareness is given top priority in the country. Investor education would provide investors with the tools to protect themselves against fraud (and other abuses) and to assess the risks associated with particular investments. Educated investors also can better choose investments that are the most appropriate for them in light of their individual circumstances, such as age, wealth, income, debt and years to retirement. Investor education has become even more important with the rise in popularity of the internet, which may bring more first-time investors into the securities markets. I am happy to note the progress made by SEBI in improving the level of investor education and financial literacy and hope that efforts in this direction will be further strengthened in future.

Today, it is my privilege to initiate the process of disbursal of disgorgement proceeds to investors who have been identified as rightful beneficiaries of the gains recovered from the wrong doers. This is a significant milestone since this is the first time that not only the manipulators are being penalized but the amount recovered is being redistributed to the persons who were deprived of their gains. I am sure this first but significant step will go a long way towards making the investors feel safe and secure while investing in the stock markets. I take this opportunity to urge SEBI to reinforce its endeavour for identification of persons who have made undue gains and seek to ensure that such gains are reallocated to the investors who had suffered the losses unfairly.

While celebrating this occasion, I would also urge SEBI to redouble its efforts in protecting and promoting the interests of all our investors and making our country the best investment destination. I wish SEBI all success in its endeavors, particularly towards strengthening the cause of investor protection in the country.”

Audit committee to approve the appointment of Chief financial officer

Audit committee to approve the appointment of Chief financial officer of appointment of ‘CFO’ by the Audit Committee- (Insertion of Clause 49(II)(D)(12A))

In order to ensure that the CFO has adequate accounting and financial management expertise to review and certify the financial statements as required under Clause 49 of the Listing Agreement, SEBI has been decided that the appointment of the CFO is approved by the Audit Committee before finalization of the same by the management. The Audit Committee, while approving the appointment, shall assess the qualifications, experience & background etc. of the candidate.

Source-Listing Conditions-Amendments to the Equity Listing Agreement-CIR/CFD/DIL/1/2010 www.sebi.gov.in

Half -yearly disclosure of Balance sheet item by listed entities

Securities and exchanges board of india as a part of disclosure requirements for listed entities

and also to bring more transparency and efficiency in the governance of listed entities has been decided to specify certain listing conditions so to amend the Equity Listing Agreement.

To have more frequent disclosure of the asset-liability position of entities, SEBI has been decided that listed entities shall disclose within forty-five days from the end of the half-year, as a note to their half-yearly financial results, a statement of assets and liabilities in the specified format.

source.www.sebi.gov.in (Listing Conditions-Amendments to the Equity Listing Agreement) CIR/CFD/DIL/1/2010

SEBI fixed timeline for submission and publication of financial results by listed companies

Securities and exchange board of India fixed Timelines for submission and publication of financial results by listed entities

To streamline the submission of financial results by listed entities by making it uniform and to reduce the timeline for submission of the same to the stock exchanges, SEBI decided that listed entities shall disclose, on standalone or consolidated basis, their quarterly (audited or un-audited with limited review), financial results within 45 days of the end of every quarter.

Secondly, audited annual results on stand-alone as well as consolidated basis, shall be disclosed within 60 days from the end of the financial year for those entities which opt to submit their annual audited results in lieu of the last quarter unaudited financial results with limited review.

and With regard to publication of consolidated financial results alone, the following, viz.,(a) Turnover (b) Profit before tax and (c) Profit after tax on a stand-alone basis shall also be published

(Listing conditions-Amendments to the Equity Listing Agreement CIR/CFD/DIL/1/2010) source www.sebi.gov.in

SEBI directs exchanges to post all orders on websites

Market regulator Securities and Exchange Board of India has directed stock exchanges to post all their regulatory orders and arbitration awards on websites from this fiscal to ensure greater transparency for investors. The exchanges have also been asked to post all such orders since April 1, 2007, on their websites within 30 days. SEBI said the move, prompted by feedback from investor associations, aims at improving transparency in disclosing regulatory orders andarbitration awards issued by stock exchanges. ‘All regulatory orders and arbitration awards as and when issued by Exchanges from the date of this circular (April 1, 2010) shall be posted on their Website immediately,’ said a SEBI circular on Thursday. Besides, it added, that exchanges ’shall post all their regulatory orders and arbitration awards issued since April 1, 2007, on their websites within 30 days.’ It said the directive covers all orders against listed companies and trading/clearing members issued bystock exchanges. SEBI said exchanges will have to inform the regulator about the implementation status of the directive in their monthly/quarterly development report.

source- www. forum4finance.co

Corporate governance philosophy at Infosys

"The Board of directors is at the crore of our corporate governance practice and oversees how management serves and protects the long-term interest of all our stake holders. we believe that an active, well-informed and independent board is necessary to ensure highest standards of corporate governance.''

(Infosys annual report 2007-08)