Companies exclusively listed on De-recognized/Non-operational Stock Exchanges

CIRCULAR 
 
CIR/MRD/DSA/18/2014 May 22, 2014 
 

To 
 
The Managing Directors/Chief Executive Officers/ 
Officiating Executive Directors of All the Stock Exchanges 
 
Dear Sir/Madam, 
 
Sub: Companies exclusively listed on De-recognized/Non-operational Stock 
Exchanges. 
 
1. SEBI vide circular dated May 30, 2012 (Exit Circular) issued guidelines in respect of 
exit options to stock exchanges. In terms of these guidelines, if the stock exchange is 
not able to achieve the prescribed turnover of Rs 1000 Crore on continuous basis or 
does not apply for voluntary surrender of recognition and exit before the expiry of two 
years from the date of SEBI circular dated May 30, 2012, SEBI shall proceed with 
compulsory de-recognition and exit of the stock exchanges, in terms of the conditions 
as may be specified by SEBI. 

Applicability 

2. The provisions of this Circular are applicable for all those stock exchanges which have not achieved the prescribed turnover of Rs. 1000 Crore on continuous basis on or 
before May 30, 2014. 

Directions to Stock Exchanges to deal with companies exclusively listed on 
non-operational stock exchanges 

3. In line with the above provisions, the following shall be applicable:- 

i. The exclusively listed companies of such non-compliant stock exchanges may 
opt for listing in nation-wide exchanges after complying with listing norms of main board or the diluted listing norms, if any, on or before the exit of the exchange, either on voluntary or compulsory basis. Nation-wide stock exchanges shall facilitate the listing of these companies on priority basis in a time bound manner. For this purpose, these nation-wide stock exchanges shall immediately create a separate dedicated cell to expedite processing the listing requests from such companies. 

ii. Such exclusively listed companies may also opt for voluntary delisting before 
the de-recognition of the stock exchanges by following the existing delisting 
norms of SEBI in terms of SEBI (Delisting of Equity Shares) Regulations, 2009. 
Nation-wide stock exchanges shall provide a platform to these companies to 
facilitate reverse book building for voluntary delisting using their platform. 

iii. With a view to facilitate voluntary delisting, if they so desire, it is clarified that for 
such companies as referred to at Para 2(ii) above, the requirements of 
‘Minimum Public Shareholding’ prescribed in Rules 19(2)(b) and 19A of the 
Securities Contracts (Regulation) Rules, 1957 and Clause 40A of the Listing 
Agreement, shall not be applicable. 

iv. In case of companies exclusively listed in the non-operational stock exchanges 
that are not traceable or where the data available is more than three years old, 
the process of inclusion in list of companies identified as 'Vanishing' 
(maintained by Ministry of Corporate Affairs) may be initiated by the respective 
stock exchanges. 

v. As per the 'Exit Circular' the exclusively listed companies, which fail to obtain 
listing on any other stock exchange, which do not voluntary delist or which are 
not considered as 'Vanishing companies', will cease to be listed company and 
will be moved to the dissemination board by the existing stock exchange. It 
shall be the responsibility of the exchanges which are being derecognized 
either on voluntary or compulsory basis, to place their exclusively listed 
companies on the dissemination board. These exchanges shall ensure that the 
database of the exclusively listed company is transferred to SEBI and to those stock exchanges on whose dissemination board, the shares of these companies are available. 

4. This circular is issued in exercise of powers conferred under Section 11 (1) and 11(2) 
(j) of the Securities and Exchange Board of India Act, 1992, to protect the interests of 
investors in securities and to promote the development of, and to regulate the 
securities market. 

5. This circular is available on SEBI website at www.sebi.gov.in. 
 

Yours faithfully, 
 
Sunil Kadam 
General Manager 
Ph: +912226449630 
Email: sunilk@sebi.gov.in