Posts Tagged ‘Equity Listing Agreement’


Circular, CIR/CFD/DIL/3/2013, dated January 17, 2013

To

All Stock Exchanges

All Registered Merchant Bankers

1. SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 (“SEBI (ESOS & ESPS) Guidelines”) were issued to enable listed entities to reward their employees through stock option schemes and stock purchase schemes and to ensure that such schemes introduced by the companies are within the regulated framework.

2. It has come to the notice of SEBI that some listed entities have been framing their own employees benefit schemes wherein Trusts have been set up to deal in their own securities in the secondary market, which was not envisaged within the purview of SEBI (ESOS and ESPS) Guidelines 1999.

3. It is apprehended that some entities may frame such schemes with the purpose of dealing in its own securities with the object of inflating, depressing, maintaining or causing fluctuation in the price of the securities by engaging in fraudulent and unfair trade practices. Such dealing in the company’s shares by the Trusts may also raise regulatory concerns regarding compliance with SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to the Securities Market) Regulations, 2003 and SEBI (Prohibition of Insider Trading) Regulations, 1992.

4. In order to address the concerns over acquisition of shares by employee welfare Trusts from the secondary market, it has been decided to prohibit the listed entities from framing any employee benefit schemes involving acquisition of own securities from the secondary market.

5. In order to implement the above decision, certain listing conditions are hereby specified by way of inserting Clause 35C in the Equity Listing Agreement as given in Annexure I.

6. In respect of those companies, which have already framed and implemented before the date of this circular any employee benefit schemes involving dealing in the securities of the company, which are not in accordance with SEBI (ESOS and ESPS) Guidelines, it has been decided that:-

(i) such companies will be required to inform the details of their schemes to the Stock Exchanges within 30 days from date of this circular, in the format provided in Annexure II to this circular and to disseminate the said information on their website.

(ii) such companies shall align any existing employee benefit schemes with SEBI (ESOS and ESPS) Guidelines on or before June 30, 2013.

7. In view of the above, it has also been decided to amend the SEBI (ESOS and ESPS) Guidelines 1999 as provided in Annexure III. The amendments made vide this circular shall come into force with immediate effect.

8. All stock exchanges are advised to ensure compliance with this circular, and carry out the necessary amendments in their Listing Agreement accordingly.

9. This circular is being issued in exercise of the powers under Section 11 read with Section 11A of the Securities and Exchange Board of India Act, 1992.

10. This circular is available on SEBI website at www.sebi.gov.in under the categories “Legal Framework” and “Issues and Listing”.

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Click here to download the complete text of the above Circular in PDF Format.

Source: Securities and Exchange Board of India.


CIRCULAR, CIR/CFD/DIL/2/2013, dated January 3, 2013

To

The Stock Exchanges

1. It has been brought to our notice that certain listed companies have been giving monthly disclosure of their sales/turnover/production figures to their respective trade bodies/industry associations and the same is not disclosed to the stock exchanges.

2. The listed companies are guided by Clause 36 of the Listing Agreement of the stock exchanges which, inter-alia, states that:

“The Issuer will intimate to the Stock Exchanges, where the company is listed immediately of events such as strikes, lock outs, closure on account of power cuts, etc. and all events which will have a bearing on the performance / operations of the company as well as price sensitive information both at the time of occurrence of the event and subsequently after the cessation of the event in order to enable the security holders and the public to appraise the position of the Issuer and to avoid the establishment of a false market in its securities. In addition, the Issuer will furnish to Exchange on request such information concerning the Issuer as the Exchange may reasonably require”.

3. It is therefore, reiterated that all the events or material information which will have a bearing on the performance / operations of the company as well as price sensitive information shall be first disseminated to the stock exchanges as required under Clause 36 of the Listing Agreement.

4. Stock exchanges are advised to take into account the requirements of this Circular and to bring the same to the notice of the listed companies.

5. This Circular is issued in exercise of the powers conferred under Section 11 read with Section 11A of the Securities and Exchange Board of India Act, 1992.

6. This Circular is available on SEBI website at www.sebi.gov.in under the categories “Legal Framework” and “Issues and Listing”.

Click here to download the complete text of the above Circular in PDF Format.

Source: Securities and Exchange Board of India.


CIRCULAR, CIR/CFD/DIL/11/2012, dated August 29, 2012

To

All Stock Exchanges

1. Please refer to circular Nos. CIR/CFD/DIL/10/2010 and CIR/CFD/DIL/1/2012 dated December 16, 2010 and February 08, 2012 respectively, on the captioned subject.

2. In continuation of the above and with a view to facilitate listed entities to comply with the minimum public shareholding requirements within the time specified in Securities Contracts (Regulation) Rules, 1957 (“SCRR, 1957”), the following additional methods shall be available:-

a. Rights Issues to public shareholders, with promoters/promoter group shareholders forgoing their rights entitlement.

b. Bonus Issues to public shareholders, with promoters/promoter group shareholders forgoing their bonus entitlement.

3. Listed entities desirous of achieving the minimum public shareholding requirement through other means may approach SEBI with appropriate details. Further, listed entities desirous of seeking any relaxation from the available methods may approach SEBI with appropriate details. Such requests would be considered by SEBI based on merit. SEBI would endeavour to communicate its decision within 30 days from the date of receipt of such requests.

4. Necessary amendments to Clause 40A of the Listing Agreement based on the above are placed in the Annexure to this Circular.

5. The above listing conditions are specified in exercise of the powers conferred under Section 11 read with Section 11A of the Securities and Exchange Board of India Act, 1992, and Rule 19A of the Securities Contracts (Regulation) Rules, 1957. The said listing conditions should form part of the existing Listing Agreement of the stock exchange.

6. All stock exchanges are advised to ensure compliance with this circular and carry out the amendments in their Listing Agreement as per the Annexure to this circular.

7. This circular is available on SEBI website at www.sebi.gov.in under the categories “Legal Framework” and “Issues and Listing”.

Annexure: Amendments to Clause 40A of the Equity Listing Agreement

In sub-clause (ii) of Clause 40A of the Listing Agreement, after item (d), the following shall be inserted:-

“(e) Rights Issues to public shareholders, with promoter/promoter group shareholders forgoing their entitlement to equity shares, whether present or future, that may arise from such issue.

(f) Bonus Issues to public shareholders, with promoter/promoter group shareholders forgoing their entitlement to equity shares, whether present or future, that may arise from such issue.

(g) any other method as may be approved by SEBI, on a case to case basis.”

Click here to download the complete text of the above Circular in PDF Format- CIRCULAR, CIR/CFD/DIL/11/2012, dated August 29, 2012.

Source: Securities and Exchange Board of India.

 

 

 


Amendment to the Equity Listing Agreement – Platform for E-Voting by Shareholders of Listed Entities

Circular, CIR/CFD/DIL/6/2012, dated July 13, 2012

To

All Recognised Stock Exchanges

1. Section 192A of the Companies Act, 1956, read with the Companies (Passing of the Resolution by Postal Ballot) Rules, 2001 (the Rules) obligates the listed companies to conduct certain businesses only by way of postal ballot. The Companies Act and the Rules also permit the companies to pass any other business through postal ballot apart from those businesses which are to be transacted mandatorily through postal ballot. Further, SEBI (Buy Back of Securities) Regulations, 1998, SEBI (Delisting of Equity Shares) Regulations, 2009, SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 and SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 require listed companies to pass certain additional businesses through postal ballot.

2. As per section 192A, a postal ballot also includes voting by electronic mode. It had been the endeavor of the Central Government to provide wider participation of shareholders in decisions of the companies through electronic voting process. Hon’ble Finance Minister in his budget speech for FY 2012-13 has also proposed for providing opportunities for wider shareholder participation in important decisions of the companies through electronic voting (e-voting) facilities, besides existing process for shareholder voting.

3. In order to have secured electronic platform for capturing accurate electronic voting processes, Ministry of Corporate Affairs has vide circular dated December 27, 2011 clarified that any agency providing e-voting platform is required to obtain a certificate from Standardization Testing and Quality Certification (STQC) Directorate, Department of Information Technology, Ministry of Communication and IT, Government of India, New Delhi. Presently, both the Depositories – Central Depository Services (India) Limited and National Securities Depository Limited – are providing e-voting platform, after obtaining necessary certifications.

4. In order to implement the aforesaid and to enable wider participation of shareholders in important proposals, it has been decided to mandate the listed companies to enable e-voting facility also to their shareholders, in respect of those businesses which are transacted through postal ballot by the listed companies. To begin with, this requirement shall be applicable to top 500 listed entities at BSE and NSE, chosen based on the market capitalization computed as on the date of this circular. It has, therefore, been decided to specify suitable listing conditions in this regard and amend the Equity Listing Agreement as per the Annexure.

5. In order to effectively implement the process of e- voting:

(a) the concerned listed companies shall choose any one of the agencies, which is currently providing e-voting platform for this purpose;

(b) agencies providing such e-voting platform shall ensure that the process for e-voting is explained in the e-voting platform along with necessary “FAQs” and shall also ensure that the draft resolutions, explanatory statement and other annexures, if any, sent to the shareholders are displayed prominently in the concerned page of the e- voting platform.

6. The amendment as specified in Annexure shall be applicable for the shareholders’ meetings, for which notices are issued on or after October 01, 2012. However, the listed companies are at liberty to provide e-voting facility to their shareholders in the meetings for which notices have been sent prior to October 01, 2012.

7. The Recognised Stock Exchanges are advised to notify the list of listed companies, for which the above decision shall be applicable, as per the criteria specified at point 4 above.

8. The above listing conditions are specified in exercise of the powers conferred under Section 11 read with Section 11A of the Securities and Exchange Board of India Act, 1992. The said listing conditions should form part of the existing Equity Listing Agreement of the stock exchange.

9. All Recognised Stock Exchanges are advised to ensure compliance with this circular and carry out the amendments in their Equity Listing Agreement as per the Annexure to this circular.

10. This circular is available on SEBI website at www.sebi.gov.in under the categories “Legal Framework” and “Issues and Listing”.

Yours faithfully,

Sunil Kadam

General Manager

+91-22-26449630

sunilk@sebi.gov.in

 

Annexure

Amendments to Equity Listing Agreement

After Clause 35A, a new Clause 35B shall be inserted, namely;-

35B. (i) The issuer agrees to provide e-voting facility to its shareholders, in respect of those businesses, which are transacted through postal ballot. Such e-voting facility shall be kept open for such period specified under the Companies (Passing of the Resolution by Postal Ballot) Rules, 2001 for shareholders to send their assent or dissent.

(ii) Issuer shall continue to enable those shareholders, who do not have access to e-voting facility, to send their assent or dissent in writing on a postal ballot pursuant to the provisions of the Companies (Passing of the Resolution by Postal Ballot) Rules, 2001 or amendments made thereto.

(iii) Issuer shall utilize the service of any one of the agencies providing e-voting platform, which is in compliance with conditions specified by the Ministry of Corporate Affairs, Government of India, from time to time.

(iv) Issuer shall mention the Internet link of such e-voting platform in the notice to their shareholders”

Click here to download the complete text of the above Circular in PDF Format- Amendment to the Equity Listing Agreement – Platform for E-Voting by Shareholders of Listed Entities. 

Source: Securities and Exchange Board of India.