Sebi relaxes minimum public holding norms 

#GS3 #Economy 

The Sebi move is aimed at easing such compliance rules amid the disruptions caused by the coronavirus pandemic. 

  • The Securities and Exchange Board of India (Sebi) on Thursday relaxed the 25 per cent minimum public shareholding norm and advised exchanges not to take penal action till August 2020 in case of non-compliance. 
  • In a circular, Sebi said it has decided to grant relaxation from applicability of minimum public shareholding (MPS) requirement.  
  • The rules have been relaxed for listed entities for whom the deadline to comply with MPS requirements falls between the period from March 1, 2020 to August 31, 2020. Under Sebi norms, listed entities are required to have at least 25 per cent public shareholding. 
  • Stock exchanges have been asked to not take any penal action against such entities in case of non-compliance during the said period.  
  • Penal actions, if any, initiated by exchanges from March 1, 2020 till date for non-compliance of MPS requirements by such listed entities may be withdrawn. 
  • Many public sector companies are yet to fulfill the 25 per cent minimum public shareholding norms, and have been seeking deadline extensions.  
  • In July 2019, Finance Minister in her maiden Budget speech urged Sebi to consider increasing the minimum public holding in listed firms to 35 per cent from 25 per cent. However, Sebi board is yet to take a view on this proposal. 
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