An investor in Reliance Capital Ltd (RCL), which has been facing insolvency proceedings, has challenged certain regulations of SEBI’s delisting norms and a recent National Company Law Tribunal (NCLT) approval of a resolution plan for the company.

About Delisting of Shares:

1. Meaning: Delisting refers to the removal of shares of a listed company from a stock exchange. Once delisted, the securities of that company can no longer be traded on the exchange.
2. Types of Delisting: Delisting can be either voluntary or compulsory:
   1. Voluntary Delisting: In this scenario, a company makes the decision to remove its shares from a stock exchange on its own accord.
   2. Compulsory Delisting: This occurs as a punitive measure when a company fails to comply with submissions or requirements outlined in the listing agreement within specified timeframes.
3. Share Buyback: If a company wishes to delist its shares, it is required to buy back 90% of the total issued shares.

Key Facts about Securities and Exchange Board of India (SEBI)

1. Regulatory Body: SEBI is a statutory regulatory body that oversees the securities market in India.
2. Establishment: It was formed in April 1988 as an executive body and later granted statutory powers in January 1992 through the SEBI Act, 1992.
3. Responsibilities: SEBI is responsible for issuing regulations for various participants in the securities market, including listed companies, brokers, mutual funds, and rating agencies.
4. Market Oversight: It monitors and regulates the Indian capital and securities market while safeguarding the interests of investors through formulated regulations and guidelines.

Q: What are Securities in the Stock Market?

1. Securities in the stock market refer to financial instruments issued to raise funds.
2. The primary function of securities markets is to facilitate the flow of capital from those possessing it to those in need.

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