In order to bring in more transparency in the securities market, the Securities and Exchange Board of India (Sebi) today modified the disclosure norms for listed companies. Laying amendments in the listing agreement, Sebi has directed the companies to hold all unclaimed shares in public issues in a separate demat suspense account, while reducing the timelines for record dates and board-level announcements.
“There is a large quantum of shares issued pursuant to the public issues, which remain unclaimed despite the best efforts of the registrar to issue or issuers and there is no uniform practice for dealing with such shares. It has been decided to provide a uniform procedure for dealing with shares which could not be allotted to the rightful shareholder due to insufficient information or any other reason,” said Sebi.
The regulator has ordered that the unclaimed shares have to be credited to a demat suspense account opened by the issuer with one of the depository participants. Any corporate benefit accruing on unclaimed shares such as bonus shares and split , would also be credited to such accounts.
Sebi has asked all listed companies to provide the shareholding details of each individual allottee whose shares have been credited to such account.
The allottee’s account would be credited only after verifying the required details. Till then, the voting rights of these shares would remain frozen.
The market watchdog today reduced the timelines for notice period for all corporate actions like dividend, bonus and so on, irrespective of the nature of the security. The notice period for record date has been reduced to seven working days, and for board meeting, has been reduced to two working days, as compared to 30 days and seven days respectively, earlier.
Furthermore, the regulator has mandated all listed companies to declare their dividend on per share basis only. Sebi had earlier raised concern that the practice of announcing dividends as percentage to the face value of the company's shares, may often mislead the investors as the numbers appear to be substantial.
Sebi has also asked companies to disclose the details of each class of security separately. Companies are also required to provide an additional format for disclosures of voting rights pattern in the company.
