In order to strengthen the stock exchange listing agreement and to expand its scope, the Securities and Exchange Board of India (SEBI) is planning to issue new set of guidelines soon to amend the present stock exchange listing agreement, following the recent changes made to the Companies Act. A listing agreement is a contract between a stock exchange and a listed company including more than 50 clauses dealing with corporate governance and information-based disclosures such as filing of results, shareholding data, etc, which the listed companies have to implement.
At present, the level of enforcement of listing norms is not the same as it should be, while, making frequent changes to the listing agreement and getting it signed by every listed company is also lot more challenging. Therefore, instead of making frequently changes to present norms, SEBI wants to amend the regulation.
Further, the market regulator is of the view that its new listing regulations would improve compliance, information-based surveillance such as timely disclosure of company’s main events and also iron out a lot of operational issues. Further, with the new norms, SEBI can directly take action against violators than have to wait for an exchange to act first. Non-compliance with the listing agreement leads to disciplinary action against a company, which include suspension of trading or delisting.
