Primary Market - Public Issues - Central Listing Authority
Listing Procedure

Letter Precedent to Listing (Regulation 9)

1. No applicant, unless it has obtained a letter precedent to listing from the Authority, shall:

   1. make an issue of securities which is proposed to be listed on an exchange, and/or

   2. make a listing application for listing of its securities to any exchange.

2. No applicant shall make an issue of any class of securities unless it has obtained an in-principle approval from the exchange(s) where it proposes to list such securities.

3. No exchange shall consider a listing application made by an applicant, unless it is accompanied by a copy of the letter precedent to listing granted by the Authority.

4. The Board, in consultation with the Authority, may either by a general or a specific order, exempt the application of sub-regulations (1), (2) and (3) to any security or class of securities, for such period and subject to such conditions, if any, as may be specified in the order.

Application for the Letter Precedent to Listing (Regulation 10)

1. An applicant desirous of obtaining a letter precedent to listing from the Authority shall make an application to the Authority in such form and in such manner and together with such information or documents, as may be specified by the Authority, from time to time.

2. Notwithstanding anything contained in any regulations or guidelines issued by the Board, an applicant seeking listing of securities shall file only with the Authority the draft offer documents including for public and rights issues by companies and bodies corporate, or draft offer documents of schemes of mutual funds or collective investment schemes and the Board may offer its observations, if any, to the Authority on such draft offer documents

3. An application for letter precedent to listing shall specify the exchange or exchanges where the applicant is desirous of listing its securities indicating also, wherever applicable, the designated stock exchange for the purposes of finalizing the basis of allotment and for depositing the security deposit.

4. Any application for a letter precedent to listing shall be accompanied by such application fees as may be specified by the Board, in consultation with the Authority, from time to time.

Procedure on Receipt of Application at CLA (Regulation 11)

1. Upon receipt of an application under regulation 10, the Authority may direct the applicant to furnish such additional information, documents or clarifications as may be required by the Authority, for the purpose of processing the said application and thereupon the applicant shall provide all such information within the time stipulated by the Authority.

2. In the event the applicant supresses any material information or misrepresents facts to the Authority or does not provide the information or documents sought by the Authority or does not inform the Authority of any relevant and material developmentsthat take place subsequent to the filing and during the pendency of the application, the Authority shall be entitled to reject the application for letter precedent to listing.

3. The Authority shall be entitled to disclose to any person, exchange or authority the contents of the application and the information, documents or clarifications received by the Authority from the applicant and to invite their comments and views.

4. Notwithstanding the primary obligation of the applicant to furnish information or clarifications under subregulation(1), the Authority may call from the exchanges their observations or comments on the application and call from any intermediaries registered with the Board, such further information as it may deem necessary in connection with the processing of an application for a letter precedent to listing.

5. The Authority after examining the application and the information or clarifications called for, may either grant or refuse to grant the letter precedent to listing, and this shall be done within thirty days of the making of the application or of furnishing of the information or clarification by the applicant, as the case may be:

   Provided that the Authority shall not refuse to grant the letter precedent to listing unless the applicant is given an opportunity of making representation.

6. The Authority shall, while processing the application, have regard to the following factors :

   1. compliance with the provisions of the Companies Act, 1956 pertaining to issue of securities;

   2. compliance with the Guidelines or Regulations of the Board relating to Disclosure and Investor Protection;

   3. compliance with the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 or the Securities and Exchange Board of India (Collective Investment Schemes) Regulations, 1999, or other relevant regulations or guidelines issued by the Board where applicable;

   4. compliance with the listing conditions specified under the Act, the Securities Contracts (Regulation) Act, 1956 and the rules made thereunder and those specified by exchanges, or otherwise; and,

   5. such other factors as the Authority may consider relevant in connection with processing the application, including, but not limited to, the following:

      1. whether listing of securities of the applicant may be detrimental to the interests of investors or the securities market in view of the business practices, antecedents, credibility, financial morality, and market reputation of the applicant and of its promoters or group companies and of its directors or persons in control or persons acting in concert with the applicant;

      2. whether the applicant has made any provision for monitoring or control or supervision of the use of funds raised by the applicant through the issue of securities or based thereon; and,

      3. whether the applicant has made a disclosure in the offer document of the availability and mechanism of safety net, if any.

Other Provisions as to Letter Precedent to Listing (Regulation 12)

1. The Authority may, while granting the letter precedent to listing, impose such conditions as it deems fit including conditions as to the manner, the required prominence and the wordings of the disclosures to be made in the offer documents and advertisements.

2. Failure by the applicant to comply with the conditions imposed under sub-regulation (1) shall, unless otherwise waived by the Authority in writing, render the letter precedent to listing invalid.

3. Any letter precedent to listing granted by the Authority shall specify the names of the exchange(s) where the applicant may make a listing application.

4. Where the Authority issues a letter precedent to listing with any conditions, the applicant shall comply with such conditions and confirm the same to the Authority, within such time as may be specified by the Authority.

5. The Authority shall be entitled to lay down any fresh conditions subsequent to the grant of a letter precedent to listing as may be necessitated by new guidelines or directions issued by the Board or due to some relevant developments in the securities market and the applicant shall comply with such conditions and confirm the same to the Authority, within such time as may be specified by the Authority.

6. The Authority shall communicate its decision made under sub- regulation (5) of regulation 11 to the applicant and to the exchange or exchanges specified by the applicant in its application for letter precedent to listing.

7. The Authority may, subsequent to the issue of letter precedent to listing, direct the applicant, exchanges or other intermediaries registered with the Board to furnish it such information as may be necessary to enable it to determine whether the applicant is in compliance with conditions imposed by applicable rules, regulations and guidelines or by the Authority in the letter precedent to listing.

8. Any letter precedent to listing granted by the Authority under these regulations shall, unless specified otherwise by the Authority, have a validity period of 90 days by which time the subscription list for public issues and rights issues should have opened and in the case of other kind of issue, the securities should have been listed on the Exchange:

   Provided that the Authority at its discretion may, upon an application made by the applicant in this behalf, prior to the expiry of the validity period, extend the validity period of a letter precedent to listing subject to such conditions, if any, as it deems fit to impose.

9. Where an applicant changes the terms and conditions of the issue in respect of which a letter precedent to listing was granted to it or where any material developments take place which have a bearing on the issue or listing of the securities, the Authority may withdraw the letter precedent to listing: Provided the Authority shall prior to withdrawing a letter precedent to listing under this clause give an opportunity of making representation to the applicant.

10. The Authority may withdraw the letter precedent to listing where it is satisfied, based upon information available to it, that -

    1. the applicant had either suppressed material facts or misrepresented facts in its application for letter precedent to listing; or

    2. the applicant has ceased to fulfill the qualifications specified in clause (e) of sub-regulation(6) of regulation 11; or

    3. withdrawal of a letter precedent to listing is desirable in the larger interests of investors and the securities market:

Provided that the Authority shall, if it proposes to withdraw a letter precedent to listing, communicate the grounds for such proposal to the applicant and afford him an opportunity of making representation:

Provided further that the letter precedent to listing may be withdrawn by the Authority only if the securities are not listed on the exchanges and if the securities have already been listed, the Authority shall inform the Board and the exchanges for taking such action, including delisting of securities, as they may deem fit.

Appeal (Regulation 13): An order passed by the Authority declining to grant or withdrawing a letter precedent to listing shall be deemed to be an order of the Board within the meaning of clause (a) of sub-section (1) of Section 15T of the Act and shall be appealable to the Securities Appellate Tribunal in accordance with the provisions of the Act.

Application to Exchanges for Listing(Regulation 14)

1. On receipt of the letter precedent to listing from the Authority, the applicant may make a listing application to the exchange(s) in respect of which the letter precedent to listing has been granted, enclosing therewith a copy of the letter precedent to listing.

2. On receipt of the listing application, the exchange(s) shall proceed with the same in the manner provided for under the Securities Contracts (Regulation) Act, 1956 and the rules and byelaws made thereunder.

3. Unless otherwise permitted by the Authority, the applicant shall ensure that the securities for which it has obtained a letter precedent to listing are listed on the same day at all the concerned exchanges.

Appeal against Refusal of Listing by Exchange (Regulation 15)

An applicant may prefer an appeal against the decision of an exchange refusing listing to the Securities Appellate Tribunal as provided in Section 22A of the Securities Contracts (Regulation) Act, 1956.

Powers of the Authority to Regulate its Procedures and Operational Guidelines (Regulation 16)

1. Subject to the provisions of these regulations and with the previous approval of the Board, the Authority shall have power to set out and regulate its own procedures

.

2. Without prejudice to the generality of its power under subregulation (1), the Authority may, with the previous approval of the Board, frame operational guidelines for the performance of its functions.

Company or Other Body Corporate, Mutual Fund orm Collective Investment Scheme to Continue to Comply with Listing Conditions and Listing Agreement (Regulation 17)

1. These regulations are in addition to, and not in derogation of, the listing agreement and the listing conditions.

2. An exchange in which any securities of a body corporate, mutual fund or collective investment scheme are listed shall comply with the listing agreement.

3. If a company or other body corporate, mutual fund or collective investment scheme fails to comply with these regulations, the listing conditions or the listing agreement or neglects to furnish any information or documents, which are required to be furnished to the Board, to the Authority or to an exchange as per these regulations, the listing conditions or the listing agreement, it shall be liable to penalty as specified in Section 15A or Section 15HB of the Act, to be imposed in accordance with the procedure prescribed under Chapter VI A of the Act.

Power of the Board to Supersede the Authority (Regulation 18)

1. If at any time the Board is of the opinion that circumstances exist which render it necessary in the interests of investors or the securities market or in the public interest so to do, the Board may, by order, supersede the Authority for such period as may be specified in the order.

2. Upon the issuance of an order under sub-regulation (1) superseding the Authority:

   1. all Members shall, as from the date of supersession, be deemed to have vacated their offices; and

   2. all functions and powers which may, by or under the provisions of these regulations, be exercised or discharged by or on behalf of the Authority, shall until the Authority is reconstituted under sub-regulation (3), be exercised and discharged by the Board or such persons or persons the Board may direct.

3. On the expiration of the period of supersession specified in the notification issued under subregulation(1), or earlier in the discretion of the Board, the Board may reconstitute the Authority by fresh appointment and in such case any person or persons who vacated their offices under clause (a) of subregulation(2), shall not be deemed disqualified for appointment;

Provided that the Board may at any time, even before the expiration of the period of supersession, take action under this sub-regulation.