CORPORATE ACTION ANDREGULATORY MECHANISM By: Ananta Barua Executive Director Securities & Exchange Board of India
REGULATORY FRAMEWORK• Merit to Disclosure• Listed Co., proposed to be listed and other issuer• Disclosure & Transparency, Corporate Governance• Promoters• Initial Disclosure• Continuous Disclosure
DEPOSITORY• Dematerialization• Registration of transfer with depository• Register of Beneficial Owner• IPO of above 10 crores in demat• Mandatory for promoter to demat all his holdings
MCAPeriodic• Annual Report• Annual Return• MCA 21 Portal• Director Identification Number• Clause 93 - change in no. of shares held by promoters & top 10 shareholdersEvent Based• Allotment , creation of charges• Change of Directorship etc.
LISTING AGREEMENT• Continuous disclosure• Corporate Governance – Accounts – Interim FR – quarterly audited or unaudited with limited review – Consolidated FS, Cash flow, Related party transaction. – Disclosure of voting results• Minimum level of shareholding• Disclosure of voting results• Utilization of Fund or material deviation of public/rights issue.43• Price Sensitive Information• Mandatory maintenance of Website of listed cos.
SHAREHOLDING PATTERN• 25% public shareholding• Persons holding more than 1% of equity shares• Promoter/Promoters Group• Persons with PAC holding more than 5% of the total number of shares• Shares pledged or encumbered, partly paid, warrants, locked in, DR, CD• On a quarterly basis within 21 days of end of each quarter and within 10 days of any change exceeding +/- 2% of total paid up share capital• By the listed co. to RSE
TAKEOVER REGULATION• Disclosure of acquisition & disposal• Continual disclosure by person holding 25% or more and by promoter as of 31/3 of every year within 7 days• Disclosure of encumbered shares by promoters within 7 days
INSIDER TRADING• Disclosure by any person who holds/acquires more than 5% shares within 2 days• Disclosure by Directors or officer position taken in derivatives/ his dependents• Any person holding more than 5% disclose change exceeds 2% of total shareholding• Director or Officer & dependents if change exceeds Rs. 5 lakhs or 25000 shares or 1% of total shareholding whichever is lower
CORPFILING.CO.IN• Corporate filing & dissemination system for listed cos.• Announcements• Results• Shareholding• SAST declaration• Insider Trading declaration
AML• PAN compulsory for all SM transactions – 2009• CDD – obtain information to identify persons who beneficially own securities account• B.O is natural person who ultimately own or control or who exercises ultimate effective control over a legal person or arrangement
ENFORCEMENT MECHANISM• Power to call for information• Penalty for failure to furnish information or return• Penalty for failure to maintain records• Penalty for failure to furnish information, returns etc.• Call for information by ROC - 234• Prosecution• Incharge, responsible