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Listing norm breach may lead to freezing of promoter holding

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The Securities and Exchange Board of India ( Sebi) on Monday warned of specific consequences if entities are found to be breaching the listing regulations on an exchange. One of these is the freezing of promoter and promoter group holding in such an entity.
Starting Tuesday, as a result of Mondays instructions, listing agreements between entities and exchanges become redundant. All such contractual agreements will be replaced by the new Sebi regulations.
As a first call of action, exchanges would impose penalties on companies not complying with Sebi regulations.
“Recognised stock exchanges shall use imposition of fines as action of first resort in case of such noncompliance and invoke suspension of trading in case of structure on fines and scrip in a separate, ‘ Z’, category. Here, trades shall be on a trade for trade basis only.
To ensure a smooth transition, Sebi has issued a set of circulars on reporting of different aspects under the present listing regulations, such as minimum public shareholding, format of issue of financial results and scheme of arrangement.
Business Standard, New Delhi, 1st Dec.2015

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