We had vided our newsletter dated July 10th , 2023 mentioned that subject provisions of SEBI Circular dated August 5, 2022 would be made applicable to all listed entities in a phased manner. It was specified that way of a separate circular SEBI or stock exchange would specify timelines for implementation of this circular to all listed entities.
SEBI has now vided its circular dated July 19, 2023 specified timeline for implementation of this circular. The timeline is as follows:
|
Companies to be covered |
PAN freeze date |
|
Listed companies that are part of benchmark indices i.e., NIFTY 50 and SENSEX |
Already applicable as on date |
|
Top 1,000 companies in terms of BSE Market Capitalization as of June 30, 2023 (excluding companies’ part of benchmark indices) |
October 1, 2023 |
|
Next 1,000 companies in terms of BSE Market Capitalization as of June 30, 2023 |
January 1, 2024 |
|
Remaining companies listed on BSE, NSE & MSEI |
April 1, 2024 |
|
Companies getting listed on Stock Exchanges post issuance of this circular |
1st day of second quarter from the quarter in which company gets listed
e.g., For a company getting listed during January 01 to March 31, 2023, PAN of DPs should be frozen at security level as per prescribed framework latest from July 01, 2023. |
With this glide path in place now listed companies will have to gear up to comply with this. Feature of this circular is that with this new phase of applicability SEBI has asked depositories to update SEBI status of implementation of this circular every quarter in following format:
Report by Depositories for implementation of framework for restricting trading by Designated Persons by Freezing PAN at security level.
|
Sl. No |
Particulars |
Count |
|
1 |
Total number of listed companies which have appointed the Depository (NSDL/CDSL) as Designated Depository (DD) |
|
|
2 |
Total number of listed companies on which implementation of framework for restricting trading by Designated Persons (“DPs”) by Freezing PAN at security level, applicable |
|
|
3 |
Total number of unique and valid PAN's of KMP/DPs provided by issuers/ listed companies for Trading Window closure restriction to the DD, at the end of the quarter |
|
|
4 |
Total number of unique and valid PAN's of KMP/DPs provided by issuers/ listed companies for Trading Window closure restriction to the DD, at the end of the quarter |
|
|
5 |
Total number of exemptions given to DPs from Trading Window restriction in terms of Clause 4(3) of Schedule B read with regulation 9 of PIT Regulations |
|
The above table reflects that now SEBI would be reviewing implementation of this circular. Review of implementation of this circular might also lead to corrective action form SEBI if required. So, it is necessary that listed companies understand intricacies of this circular and start implementing.
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