New Rule to Require Shareholder Disclosure Before Listing
Aug. 9 – The Securities and Exchange Board of India (Sebi) announced a new rule that will require companies to disclose shareholding details one day before listing to give investors more information and improve transparency.
Changes were also made regarding how depository receipts are reported by specifying if holdings are “promoter/promoter group” and “non-promoter.”
“The board decided to mandate that the companies shall file shareholding pattern according to the Clause 35 one day prior to the date of listing, which shall be uploaded on the web site of exchanges before commencement of trading,” according to a Sebi statement.
Prior to the new rule, unlisted companies are only required to submit their shareholding pattern every quarter.
“In the quarterly shareholding pattern, the disclosure of shares held by custodians, against which depository receipts have been issued, shall be classified as promoter/promoter group and non-promoter,” said the release.
Companies must inform authorities in cases wherein there is a more than two percent change in the company’s paid-up share capital. “The board also decided that in order to ensure updated public dissemination of shareholding pattern, whenever the change (+/-) exceeds 2 percent of the paid up share capital of the company after a corporate event, companies shall file revised shareholding pattern with the stock exchanges within 10 days from the date of such change in the capital structure,” the regulator said.
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