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Union of India - Section

Section 19 in Securities Contracts (Regulation) Rules, 1957

19. Requirements with respect to the listing of securities on a recognised stock exchange.

(1)A public company as defined under the Companies Act, 1956, desirous of getting its securities listed on a recognised stock exchange, shall apply for the purpose to the stock exchange and forward along with its application the following documents and particulars :
(a)Memorandum and articles of association and, in the case of a debenture issue, a copy of the trust deed.
(b)Copies of all prospectuses or statements in lieu of prospectuses issued by the company at any time.
(c)Copies of offers for sale and circulars or advertisements offering any securities for subscription or sale during the last five years.
(d)Copies of balance-sheets and audited accounts for the last five years, or in the case of new companies, for such shorter period for which accounts have been made up.
(e)A statement showing-
(i)dividends and cash bonuses, if any, paid during the last ten years (or such shorter period as the company has been in existence, whether as a private or public company),
(ii)dividends or interest in arrears, if any.
(f)Certified copies of agreements or other documents relating to arrangements with or between :-
(i)vendors and/or promoters,
(ii)underwriters and sub-underwriters,
(iii)brokers and sub-brokers.
(g)Certified copies of agreements with-
(i)managing agents and secretaries and treasurers,
(ii)selling agents,
(iii)managing directors and technical directors,
(iv)general manager, sales manager, manager or secretary.
(h)Certified copy of every letter, report, balance-sheet, valuation contract, court order or other document, part of which is reproduced or referred to in any prospectus, offer for sale, circular or advertisement offering securities for subscription or sale, during the last five years.
(i)A statement containing particulars of the dates of, and parties to all material contracts, agreements (including agreements for technical advice and collaboration), concessions and similar other documents (except those entered into in the ordinary course of business carried on or intended to be carried on by the company) together with a brief description of the terms, subject-matter and general nature of the documents.
(j)A brief history of the company since its incorporation giving details of its activities including any reorganisation, reconstruction or amalgamation, changes in its capital structure, (authorised, issued and subscribed) and debenture borrowings, if any.
(k)Particulars of shares and debentures issued-(i) for consideration other than cash, whether in whole or part, (ii) at a premium or discount, or (iii) in pursuance of an option.
(l)A statement containing particulars of any commission, brokerage, discount or other special terms including an option for the issue of any kind of the securities granted to any person.
(m)Certified copies of-
(i)[ acknowledgement card or the receipt of filing offer document with the Securities and Exchange Board of India;] [Substituted by the Securities Contracts (Regulation) (Amendment) Rules, 1996, w.e.f. 23.12.1996. Prior to its substitution, sub-clause (i), read as under: (i) letters of consent of the Controller of Capital Issues.]
(ii)agreements, if any, with the Industrial Finance Corporation, Industrial Credit and Investment Corporation and similar bodies.
(n)Particulars of shares forfeited.
(o)A list of highest ten holders of each class or kind of securities of the company as on the date of application along with particulars as to the number of shares or debentures held by and the address of each such holder.
(p)Particulars of shares or debentures for which permission to deal is applied for :
Provided that a recognised stock exchange may either generally by its bye-laws or in any particular case call for such further particulars or documents as it deems proper.
(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.]
(3)A company applying for listing shall, as a condition precedent, undertake inter alia-
(a)
(i)that letters of allotment will be issued simultaneously and that, in the event of its being impossible to issue letters of regret at the same time, a notice to that effect will be inserted in the press so that it will appear on the morning after the letters of allotment have been posted,
(ii)that letters of right will be issued simultaneously,
(iii)that letters of allotment, acceptance or rights will be serially numbered, printed on good quality paper and examined and signed by a responsible officer of the company and that whenever possible, they will contain the distinctive numbers of the securities to which they relate,
(iv)that letters of allotment and renounceable letters of right will contain a proviso for splitting and that, when so required by the exchange, the form of renunciation will be printed on the back of or attached to the letters of allotment and letters of right,
(v)that letters of allotment and letters of right will state how the next payment of interest or dividend on the securities will be calculated,
(b)to issue, when so required, receipts for all securities deposited with it whether for registration, sub-division, exchange or for other purposes ; and not to charge any fees for registration of transfers, for sub-division and consolidation of certificates and for sub-division of letters of allotment, renounceable letters of right, and split, consolidation, renewal and transfer receipts into denominations of the market unit of trading;
(bb)to issue, when so required, consolidation and renewal certificates in denominations of the market unit of trading to split certificates, letters of allotment, letters of right, and transfer, renewal, consolidation and split receipts into smaller units, to split call notices, issue duplicates thereof and not require any discharge on call receipts and to accept the discharge of members of stock exchange on split, consolidation and renewal receipts as good and sufficient without insisting on the discharge of the registered holders;
(c)when documents are lodged for sub-division or consolidation or renewal through the clearing house of the exchange :
(i)to accept the discharge of an official of the stock exchange clearing house on the company's split receipts and consolidation receipts and renewal receipts as good and sufficient discharge without insisting on the discharge of the registered holders, and:
(ii)to verify when the company is unable to issue certificates or split receipt or consolidation receipts or renewal receipts immediately on lodgement whether the discharge of the registered holders, on the documents lodged for sub-division or consolidation or renewal and their signatures on the relative transfers are in order;
(d)on production of the necessary documents by shareholders or by members of the exchange, to make on transfers an endorsement to the effect that the power of attorney or probate or letters of administration or death certificate or certificate of the Controller of Estate Duty or similar other document has been duly exhibited to and registered by the company;
(e)to issue certificates in respect of shares or debentures lodged for transfer within a period of one month of the date of lodgement of transfer and to issue balance certificates within the same period where the transfer is accompanied by a larger certificate;
(f)to advise the stock exchange of the date of the board meeting at which the declaration or recommendation of a dividend or the issue of right or bonus share will be considered;
(g)to recommend or declare all dividends and/or cash bonuses at least five days before the commencement of the closure of its transfer books or the record date fixed for the purpose and to advise the stock exchange in writing of all dividends and/or cash bonuses recommended or declared immediately after a meeting of the board of the company has been held to finalise the same;
(h)to notify the stock exchange of any material change in the general character or nature of the company's business;
(i)to notify the stock exchange of any change-
(i)in the company's directorate by death, resignation, removal or otherwise,
(ii)of managing director, managing agent or secretaries and treasurers,
(iii)of auditors appointed to audit the books and account of the company;
(j)to forward to the stock exchange copies of statutory and annual reports and audited accounts as soon as issued, including directors' report;
(k)to forward to the stock exchange as soon as they are issued, copies of all other notices and circulars sent to the shareholders including proceedings of ordinary and extraordinary general meetings of the company and to file with the stock exchange certified copies of resolutions of the company as soon as such resolutions become effective;
(l)to notify the stock exchange prior to intimating the shareholders of any new issue of securities whether by way of right, privilege bonus or otherwise and the manner in which it is proposed to offer or allot the same;
(m)to notify the stock exchange in the event of re-issue of any forfeited securities or the issue of securities held in reserve for future issue;
(n)to notify the stock exchange of any other alteration of capital including calls;
(o)to close the transfer books only for the purpose of declaration of dividend or issue of right or bonus shares or for such other purposes as the stock exchange may agree and to give notice to the stock exchange as many days in advance as the exchange may from time to time reasonably prescribe, stating the dates of closure of its transfer books (or, when the transfer books are not to be closed, the date fixed for taking a record of its shareholders or debentureholders) and specifying the purpose or purposes for which the transfer books are to be closed (or the record is to be taken); and in the case of a right or bonus issue to so close the transfer books or fix a record date only after the sanctions of the competent authority subject to which the issue is proposed to be made have been duly obtained, unless the exchange agrees otherwise;
(p)to forward to the stock exchange an annual return immediately after each annual general meeting of at least ten principal holders of each class of security of the company along with particulars as to the number of shares or debentures held by, and address of, each such holder;
(q)to grant to shareholders the right of renunciation in all cases of issue of rights, privileges and benefits and to allow them reasonable time not being less than four weeks within which to record, exercise, or renounce such rights, privileges and benefits and to issue, where necessary, coupons or fractional certificates or provide for the payment of the equivalent of the value of the fractional right in cash unless the company in general meeting or the stock exchange agrees otherwise;
(r)to promptly notify the stock exchange-
(i)of any action which will result in the redemption, cancellation or retirement in whole or in part of any securities listed on the exchange,
(ii)of the intention to make a drawing of such securities, intimating at the same time the date of the drawing and the period of the closing of the transfer books (or the date of the striking of the balance) for the drawing,
(iii)of the amount of securities outstanding after any drawing has been made;
(s)to intimate the stock exchange any other information necessary to enable the shareholders to apprise the position of the company and to avoid the establishment of a false market in the shares of the company;
(t)
(t)that in the event of the application for listing being granted, such listing shall be subject to the rules and bye-laws of the exchange in force from time to time and that the company will comply within a reasonable time, with such further listing requirements as may be promulgated by the exchange as a general condition for new listings.
(4)[ An application for listing shall be necessary in respect of the following:
(a)all new issues of any class or kind of securities of a company to be offered to the public;
(b)all further issues of any class or kind of securities of a company if such class or kind of securities of the company are already listed on a recognised stock exchange.]
(5)A recognised stock exchange may suspend or withdraw admission to dealings in the securities of a company or body corporate either for a breach of or non-compliance with, any of the conditions of admission to dealings or for any other reason, to be recorded in writing, which in the opinion of the stock exchange justifies such action :Provided, however, that no such action shall be taken by a stock exchange without affording to the company or body corporate concerned a reasonable opportunity by a notice in writing, stating the reasons, to show cause against the proposed action :[Provided further that where a recognised stock exchange has withdrawn admission to dealings in any security, or where suspension of admission to dealings has continued for a period exceeding three months, the company or body corporate concerned may prefer an appeal to the Securities Appellate Tribunal constituted under section 15K of the Securities and Exchange Board of India Act, 1992 (15 of 1992), and the procedure laid down under the Securities Contracts (Regulation) (Appeal to Securities Appellate Tribunal) Rules, 2000 shall apply to such appeal. The Securities Appellate Tribunal may, after giving the stock exchange an opportunity of being heard, vary or set aside the decision of the stock exchange and its orders shall be carried out by the stock exchange.] [Substituted by the Securities Contracts (Regulation) (Amendment) Rules, 2000, w.e.f. 08.08.2000. Earlier, the second proviso was amended by the Securities Contracts (Regulation) (Amendment) Rules, 1996, w.e.f. 23.12.1996.]
(6)[ A recognised stock exchange may, either at its own discretion or shall in accordance with the orders of the Securities Appellate Tribunal under sub-rule (5) restore or re-admit to dealings any securities suspended or withdrawn from the list.] [Substituted by the Securities Contracts (Regulation) (Amendment), 2000, w.e.f. 08.08.2000. Earlier, sub-rule (6) was amended by the Securities Contracts (Regulation) (Amendment), 1996, w.e.f. 23.12.1996.]
(6A)[ Except as otherwise provided in these rules or permitted by the Securities and Exchange Board of India under sub-rule (7), all requirements with respect to listing prescribed by these rules shall, so far as they may be, also apply to a public sector company.] [Substituted by the Securities Contracts (Regulations) (Second Amendment) Rules, 2010, w.e.f. 09.8.2010. Prior to its substitution, sub-rule (6A) as amended by the Securities Contracts (Regulations)(Amendment) Rules, 2010, w.e.f. 04.06.2010 and GSR 121(E) w.e.f. 09.03.1995, read as under: (6A) All the requirements with respect to listing and continuous listing prescribed by these rules, shall so far as they may be, also apply to a body corporate constituted by an Act of Parliament or any State Legislature:][***] [Omitted by the Securities Contracts (Regulation)(Amendment) Rules, 2010, w.e.f. 04.06.2010.]
(7)The [Securities and Exchange Board of India] [Substituted for 'Central Government' by the Securities Contracts (Regulation) (Amendment) Rules, 1996, w.e.f. 23.12.1996.] may, at its own discretion or on the recommendation of a recognised stock exchange, waive or relax the strict enforcement of any or all of the requirements with respect to listing prescribed by these rules.