Norms for Moving Securities From Restricted to Normal Segment

Mumbai: The Securities and Exchange Board of India (Sebi) has issued norms for shifting of securities from the restricted segment to the normal trading category.

The 'trade for trade' segment is a restricted category wherein no speculative trading is allowed and delivery of shares and payment of the consideration amount are mandatory.

For the purpose of transfer of securities from 'trade for trade' segment to normal category, capital market regulator Sebi said that a company, after establishment of connectivity with both depositories, has to approach stock exchanges having nationwide terminals.

Besides, the stock exchanges are required to verify the establishment of connectivity of the company with both the depositories -  National Securities Depository Ltd (NSDL) and Central Depository Services (India) Ltd (CDSL). Bourses upon verification may consider about transferring of securities.

However, the shifting is subject to the condition that 50 per cent of non-promoter holdings in these companies are in dematerialised form.

"The stock exchanges may consider shifting the trading in these securities to normal rolling settlement provided at least 50 per cent of other-than-promoter holdings are in dematerialised mode before shifting the trading in the securities of the company from trade-for-trade settlement mode to normal rolling settlement," Sebi said in a circular.

For this purpose, the listed companies are required to obtain a certificate from its Registrar and Transfer Agent (RTA) and submit the same to the stock exchange.

In case an issuer company does not have a separate RTA, it may obtain a certificate in this regard from a practising Company Secretary or Chartered Accountant and submit the same to the stock exchange, the regulator added.

Besides, Sebi said the securities could be shifted to the normal category if "there are no other grounds for continuation of the trading in trade-for-trade settlement mode".

The stock exchanges would have to inform the market of the names of companies which have been shifted.