Corporate Updates – 11-10-2017


SEBI issued a circular on non compliance with the Minimum Public Shareholding (MPS) requirements as per Regulation 38 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 which mandates a listed entity to comply with the MPS requirements. In order to maintain consistency and uniformity of approach in the enforcement of MPS norms mandated under regulation 38 of the Listing Regulations, procedure has been prescribed through this circular and shall be followed by the recognised stock exchanges/depositories, as applicable, with respect to non-compliant listed entities, their promoters and directors. The stock exchanges shall issue notices to such entities within 15 days from date of observation of non-compliance, intimating all actions taken / being taken and advise the entities to ensure compliance. The recognized stock exchange shall impose an increased fine of ₹10,000/- per day of non-compliance on the listed entity and such fine shall continue to be imposed till the date of compliance by such listed entity. The recognized stock exchange may also consider compulsory delisting of the non-compliant listed entity in accordance with the applicable provisions.


The Ministry of Corporate Affairs has opposed some of the recommendations made by the Securities and Exchange Board of India committee on corporate governance on the grounds that they concern matters already covered by the Companies Act. The committee, which was set up by SEBI to suggest ways in which to enhance corporate governance standards, has called for an increase in the minimum number of directors and the inclusion of at least one independent woman board member — areas under the ambit of the Companies Act and therefore not under the remit of the market regulator. The corporate affairs department also expressed concern that some recommendations seek to extend jurisdiction to unlisted companies, which are regulated by MCA. This relates to the obligations of a listed company’s board with respect to subsidiaries.

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