System-driven Disclosures in Securities Market
Summary
This circular implements the second phase of system-driven disclosures for securities market participants, specifically targeting non-promoter disclosures under SAST Regulations and director/employee disclosures under PIT Regulations. It mandates that depositories and stock exchanges establish automated procedures to share and disseminate this data starting August 1, 2018. The document outlines specific operational steps for data standardization, tagging, and discrepancy resolution while maintaining parallel compliance with existing disclosure obligations.
Text
It is now proposed to implement the next phase of the system which shall pertain to the following additional disclosures: a. Disclosures under Regulation 29(1) and 29(2) of SAST Regulations by non-promoters. b. Disclosures under Regulation 7(2) of PIT Regulations pertaining to directors and employees of the company.
The CEO and upto two levels below CEO of a company shall be deemed as employees for the purpose of system-driven disclosures in respect of Regulation 7(2) (b) of PIT Regulations.
For the purpose of system driven disclosure, the requirement specified under Regulation 29(4) of SAST Regulations shall not be applied to a scheduled commercial bank or public financial institution as pledgee irrespective of whether such a pledge is for securing indebtedness in the ordinary course of business or not.
The procedure required for implementation of the aforesaid disclosures is provided at Annexure-A.
The system would continue to run in parallel with the existing system i.e. the entities shall continue to comply with the disclosure obligations under SAST Regulations and PIT Regulations as applicable to them.
The Depositories and Stock Exchanges shall make necessary arrangements so that the aforesaid disclosures pertaining to SAST Regulations and PIT Regulations are disseminated on the websites of respective stock exchanges from August 01, 2018.
The various formats for sharing of data shall be standardized as agreed upon by the depositories and exchanges.
For the purpose of Regulation 29(4) of SAST Regulations, the depositories shall tag the scheduled commercial banks and public financial institutions in their systems for excluding them from disclosure requirements.
The depositories shall share data with each other, on a daily basis, pertaining to non-promoter shareholders of a company who are holding more than 2% in the company.
The details of shareholding of those non-promoters whose combined shareholding is more than 5% in the company shall be provided by the depositories to the stock exchanges on a daily basis.
The stock exchanges shall then identify the data requiring disclosure under SAST Regulations and disseminate the same on its website in accordance with the respective Regulations.
Any discrepancy observed by the entities must be communicated to the respective stock exchanges which may then resolve the issue in coordination with the depositories.
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Source: SecMarx — System-driven Disclosures in Securities Market. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.