The Securities and Exchange Board of India (Sebi) proposed to change the minimum threshold for voting rights for re-classification of a promoter as a public shareholder and suggested all promoter entities disclose shareholding even in case of 'nil' holding. Under the proposal, Sebi said the re-classification condition on shareholding should be amended such that the promoter and related persons seeking re-classification should not together hold 15 percent or more of the total voting rights in the listed entity.
At present, the minimum threshold requirement is 10 percent. The regulator received feedback from market participants to review the current threshold of 10 percent so that the persons who may have been promoters but are no longer in day-to-day control, having shareholding of less than 15 percent, may "opt-out" from being classified as promoters, without having to reduce their shareholding. The regulator said it received feedback regarding cases where promoters have desired re-classification but have found it difficult under the current regulatory regime.
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