SEBI Grants One-Time Relaxation on Minimum Public Shareholding Compliance
SEBI announced a one-time relaxation concerning the penal provisions outlined in the Master Circular related to Minimum Public Shareholding (MPS) requirements under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The relaxation specifically applies to listed entities whose compliance due date for MPS requirements falls between April 1, 2026, and September 30, 2026.The announcement followed a representation received from an industry body, which highlighted difficulties faced by listed entities in meeting the MPS compliance requirements. These difficulties were attributed partly to the capital market volatility resulting from ongoing geopolitical tensions in the Middle East.
Under the existing SEBI Master Circular dated July 11, 2023, recognized stock exchanges and depositories are generally mandated to prescribe procedures for listed entities failing to comply with MPS requirements. Such actions can include the levy of fines and the freezing of promoter shareholding, among other consequences.
Considering the market conditions and the representation received, SEBI decided to grant a temporary relief. Accordingly, recognized stock exchanges and depositories are advised not to impose any penal action as outlined in the Master Circular against the specified listed entities for non-compliance during the stated period. Furthermore, any penal actions that might have been initiated by the stock exchanges or depositories against these listed entities for non-compliance with MPS requirements during the period from April 1, 2026, until the date of the circular should be withdrawn.
The provisions of this relaxation are effective immediately. Stock exchanges are advised to notify all entities with listed securities and make necessary amendments to their bye-laws, rules, and regulations to implement the terms of this circular.
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