Legal Update- Ministry of Corporate Affairs amends the definition of ‘listed companies’

The Ministry of Corporate Affairs notified amendments to the Companies (Specification of Definitions details) Rules, 2014 on 19th February 2021 (“Amendment Rules”).

The aforesaid amendment has excluded certain classes of companies from the ambit of the definition of “listed companies”.

As per the Amendment Rules, following companies are exempted:

  • Public companies that do not have their equity shares listed on a recognized stock exchange but have listed their non-convertible debt securities and/or non-convertible redeemable preference shares, issued on private placement basis and as per the applicable SEBI Regulations.
  • Private companies that have listed their non-convertible debt securities on private placement basis as per the applicable SEBI Regulations.
  • Public companies that have listed their equity shares on a permitted stock exchange in a foreign jurisdiction as per section 23(3) of the Companies Act, 2013, but not listed on a recognized stock exchange.

The amendment shall come into force from 1st April 2021.

The above-mentioned classes of companies will consequently be exempted from the related compliances.

As per the proviso to the definition of “listed companies” under the Companies Act, companies which have listed or intend to list prescribed class of securities, may be excluded from this definition. This step has been taken in consultation with the SEBI and hence changes under applicable SEBI Regulations can be anticipated.

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