SEBI vide circular dated May 30, 2012 (Exit Circular) issued guidelines for exit of
De-recognized/Non-operational stock exchanges. Subsequently, vide circular dated
May 22, 2014, SEBI issued directions to the stock exchanges to address issues
faced by companies exclusively listed in non-operational stock exchanges.
2. As per the above referred circulars, inter-alia, the exclusively listed companies
which fail to obtain listing in any other nationwide stock exchange will cease to be
a listed company and will be moved to the dissemination board by the existing
3. Subsequently, SEBI has been in receipt of representations from exclusively listed
companies stating that although they are interested and eligible to migrate to the
main boards of nationwide stock exchanges, they are not in a position to opt for the
same due to paucity of time. Such companies have sought time to list in
nationwide stock exchanges. In the interest of investors of such companies, it has
been decided to allow a time line of eighteen months, within which such
companies shall obtain listing upon compliance with the listing requirements of the
nation-wide stock exchange, subject to the following:-
a) Listing in nationwide stock exchanges is permitted only in respect of those
class of securities that were already listed in the non-operational stock
b) The exclusively listed companies seeking listing on nationwide exchanges
shall not undergo any material changes in their shareholding pattern which
suggests change of control at the time of listing on nationwide stock
c) Pursuant to exit or de-recognition of the non-operational stock exchanges, the
exclusively listed companies of such stock exchanges which have been
moved to the Dissemination Boards of nation-wide stock exchanges may be
desirous of migrating to the main boards of the nation-wide stock exchanges.
However, they may not be in a position to obtain the NOC or other requisite
confirmations from the non-operational/exited stock exchanges wherein they
were originally listed.
In such instances, for the purpose of direct listing, the exclusively listed
companies which were filing returns for the last two financial years with their
respective Registrar of Companies (“RoC”) may be treated as a compliant
company and the requirement of No Objection Certificate (“NOC”) or any
other documents from non-operational/exited stock exchanges may not be
insisted upon by the nationwide exchange which is providing the listing
platform. For the listing purpose, the company shall obtain compliance
certification from any independent professionals and submit to the
nationwide stock exchanges. The nationwide stock exchanges shall also carry
out independent verification for ensuring the compliance of the requirements.
d) All the promoters and directors of such companies, who have failed to
provide the trading platform or exit to its shareholders, even after the
extended time of eighteen months will have to undergo stricter scrutiny for
their any future association with securities market. Any
company/entity/person which proposes to make public offer or get registered
with SEBI in any capacity and has/is promoter or director whose company is
in dissemination board has to demonstrate that they have made adequate
efforts for providing exit to their shareholders and that upon failure of such
efforts, such companies have remained on the dissemination board. This shall
be notwithstanding any other action that may be taken against such
promoters/directors/companies by SEBI.
e) Nationwide Stock exchange shall have a dedicated cell to process the
application of exclusively listed companies of non-operational/exited stock
exchanges. The applications of these companies for compliance with this
circular shall be disposed off as early as possible but not later than 2 months
from the date of receipt of the application.
4. Until such listing, these companies shall continue to remain in the Dissemination
Boards of the nation-wide stock exchanges.
5. The companies which are referred to the respective Registrar of Companies (RoC)
by the non-operational exchanges for the purpose of declaring as ‘vanishing
company’ may be removed from the dissemination board once the company is
identified as ‘Vanishing’ by the Ministry of Corporate Affairs (“MCA”) or RoC.
6. The provisions of this Circular are applicable to the exclusively listed companies
of all de-recognized/non-operational stock exchanges exited/exiting (Compulsory
or Voluntarily) in terms of exit circular dated May 30, 2012.
7. 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.
8. This circular is available on SEBI website at www.sebi.gov.in.