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[Cites 0, Cited by 0] [Section 19] [Entire Act]

Union of India - Subsection

Section 19(2) in Securities Contracts (Regulation) Rules, 1957

(2)Apart from complying with such other terms and conditions as may be laid down by a recognised stock exchange, an applicant company shall satisfy the stock exchange that :
(a)Its articles of association provide for the following among others-
(i)that the company shall use a common form of transfer,
(ii)that the fully paid shares will be free from all lien, while in the case of partly paid shares, the company's lien, if any, will be restricted to moneys called or payable at a fixed time in respect of such shares,
(iii)that any amount paid-up in advance of calls on any share may carry interest but shall not entitle the holder of the share to participate in respect thereof, in a dividend subsequently declared,
(iv)there will be no forfeiture of unclaimed dividends before the claim becomes barred by law,
(v)that option or right to call of shares shall not be given to any person except with the sanction of the company in general meeting :
Provided that a recognised stock exchange may provisionally admit to dealings the securities of a company which undertakes to amend its articles of association at its next general meeting so as to fulfil the foregoing requirements and agrees to act in the meantime strictly in accordance with the provisions of this clause.
(b)[ (i) At least twenty five per cent. of each class or kind of equity shares or debentures convertible into equity shares issued by the company was offered and allotted to public in terms of an offer document; or
(ii)At least ten per cent of each class or kind of equity shares or debentures convertible into equity shares issued by the company was offered and allotted to public in terms of an offer document if the post issue capital of the company calculated at offer price is more than four thousand crore rupees:
Provided that the requirement of post issue capital being more than four thousand crore rupees shall not apply to a company whose draft offer document is pending with the Securities and Exchange Board of India on or before the commencement of the Securities Contracts (Regulation) (Amendment) Rules, 2010, if it satisfies the conditions prescribed in clause (b) of sub-rule 2 of rule 19 of the Securities Contracts (Regulation) Rules, 1956 as existed prior to the date of such commencement:[Provided further that the company, referred to in sub clause (ii), shall increase its public shareholding to at least twenty five per cent, within a period of three years from the date of listing of the securities, in the manner specified by the Securities and Exchange Board of India.] [Substituted by the Securities Contracts (Regulations) (Second Amendment) Rules, 2010, w.e.f. 09.08.2010. Prior to its substitution, second proviso, read as under: Provided further that the company, referred in sub-clause (ii), shall bring the public shareholding to the level of atleast twenty five per cent by increasing its public shareholding to the extent of atleast five per cent per annum beginning from the date of listing of the securities, in the manner specified by the Securities and Exchange Board of India:][***] [Omitted by the Securities Contracts (Regulations) (Second Amendment) Rules, 2010, w.e.f. 09.08.2010. Prior to its omission, third proviso, read as under: Provided further that the company may increase its public shareholding by less than five per cent in a year if such increase beings its public shareholding to the level of twenty five per cent in that year.]]
Substituted by the Securities Contracts (Regulations) (Amendment) Rules, 2010, w.e.f. 04.06.2010. Prior to its substitution, clause (b) as amended by the Amendment Rules, 2001, w.e.f. 07.06.2001, read as under: (b) At least 10 per cent of each class or kind of securities issued by a company was offered to the public for subscription through advertisement in newspapers for a period not less than two days and that applications received in pursuance of such offer were allotted subject to the following conditions:(a) minimum 20 lakh securities (excluding reservations, firm allotment and promoters' contribution) was offered to the public;(b) the size of the offer to the public, i.e., the offer price multiplied by the number of securities offered to the public was minimum Rs. 100 crores; and(c) the issue was made only through book building method with allocation of 60 per cent of the issue size to the qualified institutional buyers as specified by the Securities and Exchange Board of India:Provided that if a company does not fulfil the conditions, it shall offer at least 25 per cent of each class or kind of securities to the public for subscription through advertisement in newspapers for a period not less than two days and that applications received in pursuance of such offer were allotted:Providedfurther that a recognised stock exchange may relax any of the conditions with the previous approval of the Securities and Exchange Board of India, in respect of a Government company within the meaning of section 617 of the Companies Act, 1956 (1 of 1956), and subject to such instructions as that Board may issue in this behalf from time to time.Explanation.- For the purpose of this clause, it is hereby clarified that where any part of the securities sought to be listed have been or are agreed to be taken up by the Central Government, a State Government, development or investment agency of a State Government, Industrial Development Bank of India, Industrial Finance Corporation of India, Industrial Credit and Investment Corporation of India Limited, Life Insurance Corporation of India, General Insurance Corporation of India and its subsidiaries, namely the National Insurance Company Limited, the New India Assurance Company Limited, the Oriental Fire and General Insurance Company Limited and the United Fire and General Insurance Company Limited or Unit Trust of India, the total subscription to the securities, whether by one or more of such bodies, shall not form part of the 10 per cent or 25 per cent of the securities, as the case may be, to be offered to the public.
(c)[ Notwithstanding anything contained in clause (b), a public sector company, shall offer and allot at least ten per cent, of each class or kind of equity shares or debentures convertible into equity shares to public in terms of an offer document.] [Inserted by the Securities Contracts (Regulations) (Second Amendment) Rules, 2010, w.e.f. 09.08.2010.]