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KoreanRegulatory Update: Securities Contracts (Regulation) Amendment Rules, 2024
Recently, the Ministry of Finance has amended the Securities Contracts (Regulation) Rules, 1957 (SCRR) vide a notification dated 28 August 2024. The amendments aim to simplify listing requirements for Indian public companies on international exchanges within the International Financial Services Centres (IFSCs) and to facilitate easier access to global capital for Indian companies.
The key changes are as follows:
- Minimum Public Offer
Rule 19(2)(b) of the SCRR requires Indian companies to offer at least 25% of their post-issue capital to the public while listing on a recognized stock exchanges. The amendment now reduces this threshold to 10% for Indian companies listing on international exchanges in IFSCs. Additionally, the different public offer thresholds based on the size of the post issue capital of the listed company will not be applicable in respect of listing of securities on a recognised stock exchange in IFSC.
- Continuous Listing Requirement
Rule 19A of the SCRR provides that every public listed company is required to maintain public shareholding of at least 25%. It further provides the timelines within which a listed company must increase its public shareholding to the required thresholds. Pursuant to the amendment, the requirement of maintaining a minimum public shareholding of 25% for a company listed on a recognized stock exchange in IFSC has been reduced to 10%.
Additionally, as per the SCRA, listed companies whose public shareholding falls below 10% due to a resolution plan under the Insolvency and Bankruptcy Code, 2016, are required to maintain the 10% threshold within 12 months of such fall in the shareholding. Now, this requirement is not applicable to companies listed on stock exchanges in IFSC.
Please click here to read the Securities Contracts (Regulation) Amendment Rules, 2024.
The information contained in this document is not legal advice or legal opinion. The contents recorded in the said document are for informational purposes only and should not be used for commercial purposes. Acuity Law LLP disclaims all liability to any person for any loss or damage caused by errors or omissions, whether arising from negligence, accident, or any other cause.
