 "sebi")
Companies will now have to furnish detailed reasons for any kind of encumbrance on shares belonging to promoters. The new rule will be applicable to listed firms for which the combined encumbrance on promoter shares exceeds half of their shareholding, or a fifth of total shareholding. The regulator had first announced the new rules around share pledging in June but a detailed circular was issued on Wednesday.
Among the details firms have to furnish are end-use of money and security cover provided. They will also have to state if the encumbrance related to any debt instrument and its credit rating. Further, disclosures will have to be made within two days of creation of encumbrance.
