E-voting made Mandatory by SEBI for Top 500 Listed Companies of BSE & NSE

The capital market regulator Securities and Exchange Board of India (SEBI) on 26 June 2012 made it mandatory for top 500 listed companies to hold e-voting with an objective to widen shareholder participation in key decisions. SEBI’s decision on e-voting is to be implemented in a phased manner. The implementation will begin by subjecting the top 500 listed companies at the Bombay Stock Exchange and the National Stock Exchange based on market capitalization to e-voting. The structural changes like scrutiny of audit reports as well as e-voting are expected to benefit the capital market in the medium term.

SEBI also decided to create a Qualified Audit Report review Committee (QARC) represented by accounting regulator ICAI (Institute of Chartered Accountants of India) and stock exchanges. The committee would be responsible for processing qualified annual audit reports filed by the listed entities with stock exchanges. The committee will be expected to study reports where accounting irregularities have been pointed out by Financial Reporting Review Board of the Institute of Chartered Accountants of India (ICAI-FRRB).
The regulator relaxed norms for Offer For Sale (OFS). OFS is a new route introduced by SEBI in early 2012 to help companies increase their public shareholding. A minimum gap of two weeks between two OFS issuances was permitted by SEBI.

SEBI made it easier for promoters of listed companies to dilute their stake and comply with public holding rules by 2013.As specified by SEBI, private sector companies and also the state-owned corporations is required to have a minimum public holding of 25% by August 2013.
In the SEBI board meeting, the regulator also announced a simpler share auction mechanism that would help listed companies to attract investors. It provided institutional investors with the option of applying for shares either with 100% margin or with a lesser margin to be fixed by stock exchanges. However in case of the lesser margin being fixed by the stock exchange the bids cannot be changed.

With regards to fulfilling public holding norms, the board decided that issuers will be required to disclose the floor price a day before the share auction.  The floor price may or may not be a part of the notice given by companies on the offer. Investors were barred from modifying or cancelling bids during the last 60 minutes from the close of the bidding session in the auction. Exchanges are required to display the indicative price during the last 60 minutes of the close of bidding session irrespective of the book being built.