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Sebi relaxes rules for promoters looking to change status

It said the re-classification condition on shareholding should be amended such that the promoter and related persons should not together hold 15% or more of total voting rights
The regulator received a feedback from market participants to review the current threshold of 10 per cent so that the persons who may have been promoters but are no longer in day-to-day control, having shareholding of less than 15 per cent, may “opt-out” from being classified as promoters without having to reduce their shareholding.
The regulator received a feedback from market participants to review the current threshold of 10 per cent so that the persons who may have been promoters but are no longer in day-to-day control, having shareholding of less than 15 per cent, may “opt-out” from being classified as promoters without having to reduce their shareholding.
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PTI   |   New Delhi   |   Published 24.11.20, 03:30 AM

The market regulator proposes to change the minimum threshold for voting rights for the re-classification of a promoter as a public shareholder and suggested that all promoter entities disclose their shareholding even in the case of “nil” holding.

Under the proposal, Sebi said the re-classification condition on shareholding should be amended such that the promoter and related persons seeking re-classification should not together hold 15 per cent or more of the total voting rights in the listed entity.  

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At present, the minimum threshold requirement is 10 per cent.

The regulator received a feedback from market participants to review the current threshold of 10 per cent so that the persons who may have been promoters but are no longer in day-to-day control, having shareholding of less than 15 per cent, may “opt-out” from being classified as promoters without having to reduce their shareholding.

Relaxation from existing requirement on a case-to-case basis has been given by Sebi and the existing provisions should be revisitied to minimise the number of exemptions provided on a case-to-case basis, the regulator said in a consultation paper.

“The exemption from... Listing Obligations and Disclosure Requirements (LODR), as extended in the case of re-classification of promoter may also be extended to re-classification pursuant to an order/direction of the government / regulator and/or as a consequence of operation of law,” Sebi said.



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