The Listing Regulations require listed entities to disclose the shareholding pattern for each class of securities in prescribed format and 100% (one hundred percent) of the shares held by the promoter/ promoter group are to be held in dematerialised (“DEMAT”) format, that is to be maintained at all times. Accordingly, SEBI issued a circular on November 30, 2015 (“Disclosure Norms Circular”) to provide the format for disclosing the shareholding pattern(s), as mentioned above, and the manner in which the shares of promoter/ promoter group are to be held in the DEMAT format. Salient features of the Disclosure Norms Circular have been summarised below:
- The holding of specified securities is to be divided into 3 (three) categories, namely, “promoter/ promoter group”, “public” and “non-promoter non-public”. Further, the details of the promoter/ promoter group shareholding(s) are to be consolidated on the basis of the PAN and folio number in order to avoid multiple disclosures of the shareholding of the same person;
- The disclosure of public shareholding is to be done under 3 (three) categories comprising of “institution” as defined under the ICDR Regulations, “central government/ state government(s)/ President of India” or “noninstitutions”. Further, names of shareholders holding 1% (one percent) or more of shares of the listed entity and shareholders acting in concert are to be disclosed separately;
- Underlying shares against which depository receipts have been issued, held by the promoter/ promoter group will be disclosed under “promoter/ promoter group” category and such shares held by entities/ persons other than the promoter/ promoter group will be classified under the “public shareholding” category. However, shareholders of such underlying shares that do not have the right to issue voting instructions and where such depository receipts have not been listed on an international stock exchange, will be categorised under the “non-public nonpromoter shareholding” category;
- Shareholding of employee trusts and schemes are to be shown separately under relevant categories in accordance with the SEBI (Share Based Employee Benefits) Regulations, 2014;
- The manner in which the calculation of the shareholding is to be done has been prescribed, along with the format for disclosing the details of the shareholding under various categories;
- The requirement of having 100% (one hundred percent) shares of promoter/ promoter group in DEMAT format will be subject to certain exemptions, mentioned in the Disclosure Norms Circular. Further, a minimum of 50% (fifty percent) of shares, held under the non-promoter category, are to be compulsorily held in the DEMAT format, however, government shareholding under the non-promoter category may be excluded for the computation of the minimum shareholding.
The Disclosure Norms Circular endeavors full disclosure in relation to shareholding patterns, not only for investor benefit but also for the securities regulator and stock exchange(s) to keep a check on the shareholding pattern of listed entities.