May 31, 2014
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CIR/MRD/DSA/18/2014: Circular on Companies exclusively listed on De-recognized /Non-operational Stock Exchanges – 22nd May, 2014 1.SEBI vide circular dated May 30, 2012 (Exit Circular) issued guidelines in respect of exit options to stock exchanges. In terms of these guidelines, if the stock exchange is not able to achieve the prescribed turnover of Rs 1000 Crore on continuous basis or does not apply for voluntary surrender of recognition and exit before the expiry of two years from the date of SEBI circular dated May 30, 2012, SEBI shall proceed with compulsory de-recognition and exit of the stock exchanges, in terms of the conditions as may be specified by SEBI. Applicability: 2. The provisions of this Circular are applicable for all those stock exchanges which have not achieved the prescribed turnover of Rs. 1000 Crore on continuous basis on or before May 30, 2014. Directions to Stock Exchanges to deal with companies exclusively listed on non-operational stock exchanges. 3. In line with the above provisions, the following shall be applicable:- i.The exclusively listed companies of such non-compliant stock exchanges may opt for listing in nation-wide exchanges after complying with listing norms of main board or the diluted listing norms, if any, on or before the exit of the exchange, either on voluntary or compulsory basis. ii. Such exclusively listed companies may also opt for voluntary delisting before the de-recognition of the stock exchanges. iii. With a view to facilitate voluntary delisting, if they so desire, it is clarified that for such companies, the requirements of ‘Minimum Public Shareholding’ prescribed in Rules 19(2)(b) and 19A of the Securities Contracts (Regulation) Rules, 1957 and Clause 40A of the Listing Agreement, shall not be applicable. iv. In case of companies exclusively listed in the non-operational stock exchanges that are not traceable or where the data available is more than three years old, the process of inclusion in list of companies identified as 'Vanishing' (maintained by Ministry of Corporate Affairs) may be initiated by the respective stock exchanges. v. As per the 'Exit Circular' the exclusively listed companies, which fail to obtain listing on any other stock exchange, which do not voluntary delist or which are not considered as 'Vanishing companies', will cease to be listed company and will be moved to the dissemination board by the existing stock exchange.