NSE Listing Agreement: Everything You Need to Know

For companies listed on the National Stock Exchange (NSE), the NSE Listing Agreement is a crucial document that governs their relationship with the exchange. The agreement outlines the listing requirements, disclosure norms, and other regulations that companies must adhere to during their tenure on the exchange.

Let`s take a closer look at the various aspects of the NSE Listing Agreement:

Listing Requirements

The NSE Listing Agreement has several requirements that companies must meet to get listed on the exchange. Some of these include:

- The company must have a minimum post-issue paid-up capital of Rs. 10 crores.

- The company must have a minimum public shareholding of 25%.

- The company must have a minimum of 200 shareholders, with no shareholder holding more than 75% of the total number of shares.

- The company must have a track record of profitability for at least three years.

- The company must comply with all the applicable securities laws and regulations.

Disclosure Norms

The NSE Listing Agreement lays down strict disclosure norms for companies listed on the exchange. Some of these include:

- The company must disclose all material events to the exchange as soon as they occur.

- The company must disclose its financial results within 45 days of the end of each quarter and audited financial results within 60 days of the end of the financial year.

- The company must disclose any change in its shareholding pattern to the exchange within two working days.

- The company must disclose any change in its management structure to the exchange within five working days.

- The company must disclose any material related-party transactions to the exchange.

Corporate Governance

The NSE Listing Agreement places great emphasis on corporate governance, and companies listed on the exchange must adhere to stringent norms in this regard. Some of these include:

- The company must have a minimum of three independent directors on its board.

- The company must have a minimum of two-thirds of its board of directors as non-executive directors.

- The company must have a separate audit committee, remuneration committee, and nomination committee.

- The company must have a robust whistleblower policy in place.

Penalties for Non-compliance

Companies that fail to comply with the provisions of the NSE Listing Agreement are liable to face penalties. The exchange has the power to impose penalties, including fines, suspension of trading, and delisting of the company`s shares.

Conclusion

The NSE Listing Agreement is a crucial document that lays down the regulatory requirements for companies listed on the National Stock Exchange. Companies must ensure that they comply with all the provisions of the agreement to avoid penalties and maintain their listing status. As a responsible corporate citizen, it is essential to maintain the highest standards of corporate governance and disclosure norms.