Monitoring Shareholding of Market Infrastructure Institutions (MIIs)
Summary
This circular extends the shareholding monitoring framework to all Market Infrastructure Institutions, including unlisted entities. It mandates the appointment of a Designated Depository to monitor compliance with specific shareholding limits and thresholds. Additionally, it requires quarterly disclosure of shareholding patterns on respective websites in accordance with LODR Regulations. This section mandates the freezing of voting rights and corporate benefits for shareholders who breach fit and proper criteria or shareholding thresholds. It outlines specific procedures for Market Infrastructure Institutions (MIIs) to report non-compliant shareholders quarterly and divest excess holdings through special windows. Finally, it establishes the effective date of the circular, rescinds previous conflicting provisions, and cites the statutory powers under which this directive is issued.
Text
The framework for monitoring and ensuring compliance with shareholding norms currently applicable to listed Stock Exchanges and listed Depositories shall be applicable to all MIIs (i.e. both listed and unlisted)
All MIIs shall disclose their shareholding pattern as per the requirements and formats specified for listed companies under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (LODR Regulations, 2015) on their respective websites
Every MII shall appoint a depository as “Designated Depository (DD)” for the purpose of monitoring of their shareholding limits... The DD of an MII, shall not be an associate... of the MII
All MIIs shall disclose their shareholding with category wise breakup as per the requirements and formats specified for listed companies under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (LODR Regulations, 2015) on a quarterly basis on their respective websites
The MIIs shall at the time of appointment of the DD provide the details of paid-up equity share capital including the number of shares to the DD and as and when there are changes, the same shall be informed to the DD on End of Day (EoD) basis
The DD shall monitor and inform the MII and stock exchange on which its shares are listed... as and when the threshold limit of 5% or 15%, as applicable under SECC Regulations, 2018 and D&P Regulations, 2018, is breached
The DD shall monitor and inform the MII and stock exchange... as and when threshold limit of combined holding of 49% of all persons’ resident outside India... in the paid-up equity share capital of an MII is breached
The DD shall: Have mechanism for coordination between the depositories for sharing of information regarding the shareholding of the stock exchange and ensure that the shareholding of Trading Members (TMs), their associates and agents does not exceed 49% of the paid-up equity share capital of the stock exchange
Monitor the aggregate shareholding limit of the TMs, their associates and agents based on their demat balance, on a daily basis, at the end of the day
Generate aggregate shareholding reports of TMs, their associates and agents on daily basis... Post receipt of such report from DD, the stock exchange shall disseminate the aggregate shareholding percentage of TMs, their associates and agents on its website on a daily basis
Send alerts to the stock exchange and TMs, their associates and agents about the breach of the caution shareholding limit of 45% by TMs, their associates and agents and the said information shall also be disclosed on the exchange website
Inform to the stock exchange, its RTA, the stock exchange where it is listed... and other depository about any breach of shareholding limit of 49% by TMs, their associates and agents
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Source: SecMarx — Monitoring Shareholding of Market Infrastructure Institutions (MIIs). Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.