The stock exchanges declined to admit the application of my company for the purpose of listing the company for shares and debentures. What is the remedy available to me?
Remedy against refusal of listing of securities
The Securities Contracts (Regulation) Act, 1956 provides the remedy for the refusal of listing of securities by the recognized Stock Exchanges. If the stock exchange refused to admit the application for listing of shares and debentures of your company which is a public company your company is entitled to file an appeal under Section 22 of the Act. Section 22 deals with right to appeal against such refusal of listing of shares by the Stock Exchanges. As per Section 22 your company is entitled to seek the reasons for its refusal within 15 days from the date of submission of the application for furnishing reasons for refusal with the Board, and may appeal to the Central Securities Appellate Tribunal. Securities Appellate Tribunal gives the opportunity of being heard to the Stock Exchange. Upon hearing the Stock Exchange, Appellate Tribunal may modify or set aside the order of the Stock Exchange. If the Tribunal set asides the order of the Stock Exchange, and grants permission, the stock exchange comply the order of the tribunal. The Tribunal shall send its order copy to the Board and to the parties of Appeal. As per clause 22A (4), the Appeal filed before Tribunal should be dealt expeditiously and to be disposed of within 6 months from the date of receipt of the Appeal.
Read Also: The Securities Laws (Amendment) Act, 2014
Procedure for listing of Securities of a public company:
- The company which prefers to list its securities on Stock Exchange, is required to comply the provisions of Companies Act and the regulations of Securities and Exchange Board of India.
- Procedure for Listing of commences with the company filing an application in the prescribed form along with documents required, with Exchange before issuance of its prospectus if securities are issued by way of a prospectus or before “offer of sale “ if securities issued by way of “offer of Sale”. Documents required to submit with Stock Exchange are Memorandum and articles of association, and trust deed in case of Debentures, copies of all prospectuses or statements in lieu of prospectuses issued by the company, copies of audited account statements and balance sheets for the last five years, statements related to dividends and interests in arrears, certified copies of agreements with promoters, vendors, underwriters, agents, secretaries, and Managers and statement of company’s contracts, and other such documents required by the Stock Exchanges.
- Notice of application for admission will be posted on the notice board or the ATS or website of Exchange one week prior to consideration by the exchange
- The Governing Board or Managing Director or Relevant Authority may grant admission to deal with Applicant company’s securities if the issuer company made compliance with the listing conditions, Securities Contracts (Regulation) Act, 1956, Securities Contracts (Regulation) Rules, 1957, the Companies Act, bye-laws and regulations of Stock Exchange or The Securities And Exchange Board of India Act and other relevant regulations from time to time.
- A Listing Agreement would be executed by the Company with the Exchange prior to approval of the listing application.
- The Relevant Authority of the said stock exchange intimate about approval of the listing application to the depositors for the Applicant company’s securities.
Adv. Anitha Gutti