CIR/MRD/DSA/18/2014 May 22, 2014
The Managing Directors/Chief Executive Officers/
Officiating Executive Directors of All the Stock Exchanges
Sub: Companies exclusively listed on De-recognized/Non-operational Stock
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.
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
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
5. This circular is available on SEBI website at www.sebi.gov.in.
GuestNotification No : CIR/MRD/DSA/18/2014
on 29 May 2014
Published in Shares & Stock
Source : ,