Listing of a Company in Stock Exchange
The listing of securities on recognized stock exchanges in India is regulated by the Companies Act, the SCRA, the SCRR, the SEBI Act and various guidelines issued by SEBI and the listing agreements executed between listed companies and stock exchanges.
Under the SCRR, the governing body of each stock exchange is empowered to suspend trading of or dealing in a listed security for breach by a listed company of its obligations under such agreement or for any other reason, subject to such company receiving prior notice of such intent of the stock exchange and upon granting of a hearing in the matter.
In the event that a suspension of a company’s securities continues for a period of in excess of 3 months, the company may appeal to Securities Appellate Tribunal (SAT) established under the SEBI Act to set aside the suspension. SEBI has the power to veto a stock exchange decisions in this regard. SEBI has also the power to amend such listing agreement and the by-laws of the stock exchanges in India.
Clause 49 of the Listing Agreement provides that if a non-executive chairman of a listed company is a promoter or is related to promoters of the company or persons occupying management positions at the board level or at one level below the board, at least one-half of the board of the company should consist of independent directors.