Shareholder's nod is not required for re-classification of promoter group members to public category, subject to certain conditions, Sebi said today.
Expressing its views on an application filed by pharma firm Alembic Pharma, the regulator said such re-classification may be allowed by the stock exchanges under listing norms subject to certain compliances.
Alembic Pharma had sought an informal guidance from Sebi on whether shareholders' approval would be required and whether the company may directly approach the stock exchanges for permission under Listing regulations.
The company had submitted to Sebi that five out of 25 persons of the promoter group have expressed the desire for re-classification of their shareholding from promoter group to public category.
"Our view is that the company may not be required to obtain approval of the shareholders for the proposed re-classification," Sebi said, adding that its response is based on the information given in the company's letter.
"Different facts or conditions might lead to a different result. Further, this letter does not express a decision of the Board on the questions referred," the regulator said.
Among others, the company submitted that the entities who wished to be re-classified are senior citizens and are not holding any control over the affairs and management of the company.
Addressing the conference, Sinha said that the nation has failed to modernise commodities market system and to take advantage of developments in this regard in rest of the world.
He also said the system has not been able to meet the basic requirement of fair price to producers and consumers and give some amount of comfort that market is being well managed.
"Even when India is among the top five producers for many commodities, it has not been able to influence global price setting..Our influence has been marginal," Sinha said.
He also noted that the country's spot market is very fragmented and there was an urgent need to have clear norms on this segment in the country.
While noting that various improvements have been made in commodities since Sebi took over regulating this market, Sinha expressed concern over low participation from producers and hedgers and said the stage has come to allow new participants like mutual funds, insurance companies and FPIs as well as new products into the commodity trading space.
Sinha noted that Sebi initially was more focused on ensuring better regulation and smooth functioning of commodities trading.
He also said significant reforms have been undertaken by the government to ensure that an effective price discovery mechanism is in place.
"An important reform in this direction is that when government announced setting up of electronic national agriculture market (ENAM) which would connect 500 local markets and the first part of it -- computerised reporting of prices has been started in 200 markets and this will ensure that producers and consumers get the benefits of price discovery," Sinha added.