Amendment to Security Contracts (Regulations) Rules, 1957 (the “Rules”)
By INSOL INDIA EDITORIAL TEAM Posted On : August 15, 2018
With a view to facilitate implementation of insolvency resolution of listed companies, the Security Contracts (Regulations) (Amendment) Rules, 2018 has been amended. The amendment introduces sub-rule (5) in rule 19A of the Rules which provides that additional time to listed companies to meet the minimum public shareholding requirement. If the public shareholding falls below 25 percent, as a result of implementation of the resolution plan, the company shall bring back the public shareholding to 25 percent within a maximum period of three years from the date of such fall, in the manner specified by Securities Exchange Board of India (“SEBI”).
However, if the public shareholding falls below 10 percent, the same shall be increased to 10 percent within a maximum time period of eighteen months from the date of such fall, in the manner specified by SEBI.