Govt Amends Public Shareholding Requirement Rules Public Shareholding for all PSES lowered to 10% Companies can raise public Shareholding level Within Three years without any Annual floor
The Department of Economic Affairs, Ministry of Finance has issued a notification today i.e., 9th August, 2010, amending the Securities Contracts (Regulation) (Amendment) Rules, 2010 which had been notified on June 4th, 2010. This notification allows for a lower public shareholding for public sector enterprises (PSEs). It also provides flexibility to all companies in attaining 25% (or 10% for public sector enterprises) public shareholding level within three years without any annual floor.
The main feature of the amendment is that the minimum requirement of public shareholding for all PSEs is lowered to 10%. A listed public sector company which has a public shareholding below 10% on the date of commencement of the Securities Contracts (Regulation) (Second Amendment) Rules, 2010 shall increase its public shareholding to at least 10% within a period of three years.
Any listed company which has public shareholding below 25% on the commencement of the Securities Contracts (Regulation) (Amendment) Rules, 2010 shall increase its public shareholding to at least 25% within a period of three years.
The Securities Contracts (Regulation) Rules notified on 4th June, 2010 provided for all listed companies to raise a minimum of 25% public shareholding.
CAclubindia
