The Ministry of Finance vide its notification dated 30th July 2021 has published the Securities Contracts (Regulation) (Second Amendment) Rules, 2021 to further amend the Securities Contracts (Regulation) Rules, 1957.
The Amendment is brought under Rule 19A which provides for maintenance of minimum public shareholding and its attainment within a specified period. These provisions can be summed up as under:
- Every listed company (other than public sector Company) shall maintain public shareholding of at least twenty five per cent.
- Any listed company which has public shareholding below twenty five per cent, shall increase its public shareholding to at least twenty five per cent, within a period of three years from the date of such commencement, in the manner specified by the Securities and Exchange Board of India.
- A company whose securities have been listed pursuant to an offer and allotment made to public, shall maintain minimum twenty five per cent of public shareholding.
- Where the public shareholding in a listed company falls below twenty five per cent at any time, such company shall bring the public shareholding to twenty five per cent within a maximum period of twelve months from the date of such fall in the manner specified by the Securities and Exchange Board of India.
- Where the public shareholding in a listed company falls below twenty five per cent in consequence to the Securities Contracts (Regulation) (Amendment) Rules, 2015, such company shall increase its public shareholding to at least twenty five per cent in the manner specified by the Securities and Exchange Board of India within a period of three years
Through this amendment, the Central Government, in the public interest, shall exempt any listed public sector company from any or all of the above provisions of this rule.
