SEBI Circular Update: Disclosure of Holding of Specified Securities in Dematerialized Form

The Securities and Exchange Board of India (“SEBI”) has issued a circular dated March 20, 2025, bearing number SEBI/HO/CFD/CFD-PoD-2/P/CIR/2025/35, providing clarifications and modifications regarding the disclosure of specified securities in dematerialized form. This update aims to enhance transparency and consistency in the securities market.

Key Highlights:

Background:

Under Regulation 31 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), listed entities are required to disclose their shareholding patterns. SEBI, through Master Circular No. SEBI/HO/CFD/PoD2/CIR/P/0155 dated November 11, 2024 (as amended), prescribed the format for such disclosures.

Modifications Introduced:

Based on feedback from depositories, stock exchanges, and market participants, SEBI has introduced the following modifications:

Amendments to Table I-IV:

·       Inclusion of details regarding Non-Disposal Undertaking (NDU), other encumbrances, and the total number of shares pledged or encumbered, including NDU.

·       Clarification that outstanding convertible securities include ESOPs. The column header “No. of Shares Underlying Outstanding Convertible Securities (including Warrants, ESOP, etc.)” explicitly mentions ESOPs.

·       Addition of a column to capture the total number of shares on a fully diluted basis (including warrants, ESOPs, and convertible securities).

Amendment to Table II:

Inclusion of a footnote specifying the details of promoters and promoter groups with NIL shareholding.

Implementation and Compliance:

·       The modified formats will be effective from the quarter ending June 30, 2025.

·       Stock exchanges are required to update their by-laws, rules, and regulations accordingly and notify all listed entities.

·       Depositories must update their systems to reflect these changes.

The modifications introduced by SEBI aim to enhance transparency, consistency, and accuracy in the disclosure of shareholding patterns. By including details of Non-Disposal Undertakings, encumbrances, and shares on a fully diluted basis, the revised formats provide investors with a clearer and more comprehensive view of shareholding structures.