Sebi tightens disclosure norms

Mumbai: Asks companies to submit shareholding details one day prior to the day of listing.

In a move that will help investors take better-informed investment decisions in the newly-listed entities, the market regulator has directed companies to submit shareholding details to stock exchanges one day prior to the day of listing.

The regulator has also amended the way depository receipts are disclosed as part of the shareholding pattern. The decisions were taken at the board meet of the Securities and Exchange Board of India (Sebi).

“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 website of exchanges before commencement of trading,” said a release issued by Sebi. Currently, unlisted companies disclose their shareholding pattern as part of their prospectus and submit it to the exchanges on a quarterly basis.

In another decision, which will bring in more transparency in terms of actual holding of depository receipts (DRs), Sebi has directed companies to classify such holdings as ‘promoter/promoter group’ and ‘non-promoter’. “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.

Further, if there is a change of more than two per cent in the paid-up share capital due to any corporate event, the same has to be disclosed to the stock exchanges within 10 days.

“The board also decided that in order to ensure updated public dissemination of shareholding pattern, whenever the change (+/-) exceeds two per cent 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,” added the release.