Pledging of Shares

The Securities and Exchange Board of India (SEBI) has informed that listed companies/ promoter(s) of listed companies are mandated to disclose the details of the pledged shares to the stock exchanges under SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

According to information available as on 30th April 2016, the data related to pledging of shares in the companies listed on the nationwide stock exchanges is as follows:-

The promoters of the companies continue to be promoters after pledging of their shares. The requirement under the aforesaid Regulations is adequate disclosures so that the investors may take well informed investment decisions.

In order to ensure transparency and to protect the interest of investors, SEBI has mandated the following disclosures in the case of listed companies:-

i.     Regulation 31 of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 requires the promoters of a listed company to disclose to the stock exchange(s) details of the shares held by them or persons acting in concert with them as and when pledged, invoked or released, within a period of seven working days.

 ii.   Further, Regulation 31 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 requires the listed companies to file the shareholding pattern with the stock exchange(s) on a quarterly basis in the prescribed format which includes the disclosure of number and percentage of shares pledged by the promoters and promoter group of the listed company.

Such information, as and when received by the stock exchange(s), is disseminated in the public domain.

This was stated by Shri Jayant Sinha, Minister of State in the Ministry of Finance in written reply to a question in Lok Sabha today.