Maintenance of Security Deposit of 1% of the amount of securities offered to public/shareholders by issuer companies with the designated stock exchanges
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Security deposit maintenance requires exchanges to preserve issuer deposits and enforce or renew bank guarantees promptly. Stock exchanges must ensure issuer companies maintain the required security deposit before opening subscription lists and keep it intact; they must recoup shortfalls from expired bank guarantees by obtaining cash or fresh/renewed guarantees, implement a tracking system with alerts at least one month before guarantee expiry, and invoke guarantees if issuers fail to restore deposits within the specified timeframe. Exchanges may not adjust the security deposit against any dues of the issuer and must implement these directions within the regulator-prescribed compliance period.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Security deposit maintenance requires exchanges to preserve issuer deposits and enforce or renew bank guarantees promptly.
Stock exchanges must ensure issuer companies maintain the required security deposit before opening subscription lists and keep it intact; they must recoup shortfalls from expired bank guarantees by obtaining cash or fresh/renewed guarantees, implement a tracking system with alerts at least one month before guarantee expiry, and invoke guarantees if issuers fail to restore deposits within the specified timeframe. Exchanges may not adjust the security deposit against any dues of the issuer and must implement these directions within the regulator-prescribed compliance period.
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