Uniform operational guidelines for the dissemination board
Securities and Exchange Board of India vide its circular CIR/MRD/DSA/14/2012 dated May 30, 2012 had inter alia revised guidelines in respect of exit policy for de-recognition/non-operational stock exchanges and exit option to shareholders of exclusively listed companies of de-recognized / non-operational stock exchanges..
Pursuant to Exchange’s circular no. 583/2012 dated July 05, 2012 the key features and the operational guidelines of the dissemination board are given below:
Exiting Stock Exchange related
- The Exiting Stock Exchange will be required to enter into an agreement with the Exchange for providing the Exchange’s Dissemination Board.
- The Exiting Stock Exchange shall pay a one-time fee for the arrangement as may be decided in the agreement.
- Exiting Stock Exchange shall provide the list of exclusively listed companies along with the following details for the companies which would be moved to the Dissemination Board:
The companies whose securities are admitted on the Exchange’s Dissemination Board shall not enter into the listing agreement with the Exchange. However, information received from such companies shall be disseminated on the Exchange’s website www.nseindia.com.
Wide publicity shall be provided about the dissemination board in one leading national daily and one local daily as part of the agreement by the Exiting Stock Exchange and the Exchange.
- Name of the Promoters with contact details
- Latest Annual Report
- Latest shareholding pattern
- Last financial results of the company
- Paid up capital of the company and face value
- Other information, if any.
Buyer and Seller related
A willing buyer and seller will be given an opportunity to place their offers using the services of the registered trading members of the Exchange. Hence buyers and sellers shall get themselves registered with the trading members of the Exchange.
The offers shall be related to the securities of companies that are admitted on the Exchange’s Dissemination Board.
The buyers and sellers shall bid/offer through their respective registered trading member of the Exchange and such buyer/seller shall communicate through these trading members of the Exchange. Trading members shall carry out the necessary compliance related to Know Your Client registration with KYC Registration Agency.
Offer/Bid related and other information
To facilitate wider participation, dissemination board will be hosted in the Capital Market Segment of the Exchange.
Market type for Dissemination Board would be in the Normal Market Segment.
Offers shall be put only through registered trading members of the Exchange and all the registered trading members for capital market segment would be eligible to participate on the dissemination board.
Order matching shall be done on the basis of matching of price and quantity.
The offers placed on the Exchange’s dissemination board shall remain valid for a week.
No contract note would be issued for matched bids/offers resulting out of the dissemination board.
No margin payments shall be applicable.
The matched orders will not be settled through the Exchange / Clearing Corporation and shall be settled bilaterally between the buyer and the seller. The matched order shall be treated as principal to principal contract between the buyer and seller and trading member will not have any obligation to settle the trade.
There will be no recourse to the settlement guarantee fund, investor grievance redressal mechanism including arbitration and investor protection fund of the Exchange for the matched bids/offers resulting out of Exchange’s Dissemination Board.
The Exchange shall not be overview the bids/offers as a matter for surveillance.
Rules, Regulations and Bye-Laws of the Exchange would not be applicable to the matched bids/offers resulting out of the Dissemination Board.
A separate webpage will be created on www.nseindia.com for the dissemination board. The webpage shall contain information regarding the Exiting Stock Exchange, Symbol, Series and other details with respect to the Company, paid up capital, registered address, details of the promoters and directors and annual report. Further, information received from the companies shall be disseminated by the Exchange on the said webpage.
The details of the offer like order date, security name, number of securities, price, ISIN shall be made available in the form of report on www.nseindia.com.
As instructed by SEBI, the Compulsory Delisted Companies shall also be made available for buying/selling on the Dissemination Board.