SEBI makes quarterly disclosure of share pledging mandatory

The Securities and Exchange Board of India (SEBI) has asked all listed companies to file quarterly shareholding pattern as well as financial results from the current quarter onwards. 

The market regulator had announced an amendment to the SEBI regulations to this effect last week that requires the companies to disclose pledging of promoter shares, if any, within seven days.

SEBI expects the new regulation to bring more transparency in the shareholding pattern of promoters and help protect the interest of stock market investors.

SEBI had amended Clause 35 of the Equity Listing Agreement, which deals with the norms for reporting the shareholding pattern of a company, to include details of shares pledged by the promoter and promoter group entities.

Amendment has also been made to the Clause 41 of the Listing Agreement, which deals with the norms for submitting quarterly financial results by a company, to include details of the shareholding pattern of promoters and promoter group, including details of pledged shares, if any.

The reporting, as per the revised formats for shareholding patterns and financial results, should start from the quarter ending 31 March 2009, SEBI said in a circular. The report for the four financial quarters of this calendar year might not contain details of pledged shares for the corresponding quarter of the previous year, it added.

SEBI has also asked the stock exchanges to revert on the status of implementation in their next monthly development report to the regulator.

The issue of pledging of shares has come to the fore after scam-hit Satyam Computer disclosed last month that all of its promoter shares were pledged with lenders and a large portion of that have been sold.