Listing and Delisting

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AN ASSIGNMENT ON

“LISTING & DELISTING OF SECURITIES TO A STOCK EXCHANGE IN INDIA”

CONTENTS

1. INTRODUCTION………………………………………………………....1 2. LISTING………...………………………………………………………….2 3. DELISTING………………………………………………………………..6 4. CONCLUSION……………………………………………………………13

iii Gujarat National Law University

CHAPTER 1 INTRODUCTION

This assignment deals with the legal aspect, i.e. Laws, rules, regulations and by-laws, of listing and delisting of securities in Stock Exchanges by Public Limited Companies in India. The Securities and Exchange Board of India is the regulator for the securities market in India. It was established on 12 April 1992 through the SEBI Act, 1992. It regulates the stock exchanges, amongst which major three are, BSE, formerly known as Bombay Stock Exchange Ltd., Established in 1875, is Asia’s first Stock Exchange and one of India’s leading exchange groups. Over the past 137 years, BSE has facilitated the growth of the Indian corporate sector by providing it an efficient capital-raising platform. Other are NSE and recently formed MCX Stock Exchange Ltd. There are various other local state level stock exchange recognized by Law in India. The second chapter of this assignment deals with listing of securities and the Act, regulations, guidelines related thereto. It also deals in details with the documents and compliances which are essential for a company before getting it enlisted in the Stock exchange. It further contains relevant provisions of The Companies Act, SEBI Guidelines as well as stock exchange guidelines. Similarly, the third chapter talks about the provisions regarding the delisting of securities, their types, the method deployed as prescribed in Act, The SEBI (Delisting of Securities) Guidelines2003 & 2009 and other regulations relating therto. Finally in the last chapter the researcher tries to conclude by looking into the present day scenario, its implications, possible loopholes and recommendation with regards to all the above.

1 Gujarat National Law University

CHAPTER 2 Listing
Listing means admittance of securities to transactions on a recognized stock exchange. The securities can be of whichever public limited company, Central Government or State Government, Quasi-governmental & other financial institutions or corporations, municipalities, etc. The objectives of listing are mainly to:    offer liquidity to securities; marshal savings for economic expansion; shield interest of shareholders by ensuring complete disclosures.

A company, eager to list its securities on the Stock Exchange shall be obligated to file an application in the prescribed form with the Stock Exchange before issue of Prospectus by the company where the securities are allotted by way of a prospectus or before issue of Offer for Sale where the securities are allotted by way of an offer for sale. Delisting of securities means perpetual removal of securities of listed company from the stock exchange where it was registered. As a result of this the company would no longer be traded at that stock exchange. Rules and guidelines for listing of securities:  Securities Contract (Regulation) Act, 1956. S. 21. of the Act deals with the listing of the public companies.  Securities Contract (Regulation) Rules 1957.

2.1 Requirements and Documents
S. 19 of the Act deals with the requirements and documents to be submitted with respect to the listing of securities on a recognized stock exchange and i.e. A. Memorandum and articles of association and, in case of a debenture issue, a copy of the trust deed. B. Copies of all prospectuses or statements in lieu of prospectuses issued by the company at any time. 2 Gujarat National Law University

C. Copies of offers for sale and circulars or advertisements offering any securities for subscription or sale during the last five years. D. Copies of balance sheets and audited accounts for the last five years, or in the case of new companies, for such shorter period for...
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