Description

RTI appeal regarding BSE's enhanced direct listing norms, impact on companies migrating from defunct regional stock exchanges, and investor protection measures for shareholders in exclusively listed companies.

Summary

This is an RTI appeal (Appeal No. 6666 of 2026) filed by Nilesh Jain before SEBI’s Appellate Authority regarding information requested about BSE’s enhanced direct listing norms and measures to protect investors in companies from defunct regional stock exchanges. The appellant’s original RTI application dated November 19, 2025 sought information about new stringent listing requirements, including operating profitability of Rs. 15 crore average over 3 years with minimum Rs. 10 crore per year, and trading requirements of 5% shares for 80% of days in 6 months.

Key Points

  • Appeal filed under Right to Information Act, 2005 against CPIO, SEBI Mumbai
  • Original RTI application filed November 19, 2025; CPIO response dated December 18, 2025
  • Appeal registered as SEBIH/A/E/25/00335 on December 22, 2025
  • Concerns raised about closure of nearly 2 dozen regional stock exchanges over recent decades
  • Thousands of listed companies affected - few hundred migrated to nationwide exchanges, others delisted or moved to dissemination board
  • Millions of public shareholders allegedly lost investments
  • Calcutta Stock Exchange (CSE) noted as only remaining regional stock exchange with approximately 2,000 listed companies
  • BSE allegedly increased direct listing norms suomoto with stringent requirements

Regulatory Changes

BSE Direct Listing Norms (Recently Enhanced):

  1. Operating profitability requirement: Rs. 15 crore average for last 3 financial years with minimum Rs. 10 crore operating profit in each year
  2. Trading requirement: At least 5% of listed shares must trade for at least 80% of days during 6-month period

Information Sought:

  • Effective date for new BSE direct listing norms
  • Previous quantum of operating profit requirement before increase to Rs. 10 crore minimum/Rs. 15 crore average
  • Whether regional stock exchanges including CSE permitted to trade shares in last 15 years and trading volumes
  • Whether NSE issued similar direct listing norms with SEBI consent
  • Investor protection measures for shareholders stuck in defunct exchange companies

CPIO Response Summary

Query 1, 2 & 4: Direct listing norms of BSE and NSE publicly available on respective websites

Query 3: Query not clear and specific, seeking clarification rather than “Information” as defined under Section 2(f) of RTI Act

Query 5: SEBI has framed policy dealing with exclusively listed companies for de-recognized/non-operational stock exchanges. Appellant directed to Chapter 6 of Master Circular for Stock Exchanges and Clearing Corporations dated December 30, 2024 on SEBI website

Compliance Requirements

Not applicable - this is an RTI appeal document, not a regulatory directive.

Important Dates

  • November 19, 2025: RTI application filed by Nilesh Jain
  • December 18, 2025: CPIO response issued
  • December 22, 2025: Appeal filed (Reg. No. SEBIH/A/E/25/00335)
  • December 30, 2024: Master Circular for Stock Exchanges and Clearing Corporations referenced in CPIO response

Impact Assessment

Investor Impact: The appeal highlights concerns affecting lakhs (hundreds of thousands) of public shareholders who invested in companies listed on defunct regional stock exchanges. The closure of approximately 2 dozen regional exchanges over recent decades has left investors with limited liquidity and potential loss of investments.

Market Structure Impact: The enhanced direct listing norms create higher barriers for companies from regional exchanges to migrate to BSE/NSE, potentially trapping more companies on dissemination boards or in delisting limbo.

Policy Significance: The appeal raises important questions about whether SEBI directed BSE to implement stringent norms to restrict migration from other exchanges, and what measures exist to protect affected investors. The reference to Chapter 6 of the Master Circular suggests existing policy framework for exclusively listed companies on de-recognized exchanges.

Procedural Note: Document appears incomplete as ground of appeal (Point 4) is cut off mid-sentence, indicating this may be a partial order or the full appellate decision is not included in this excerpt.

Impact Justification

RTI appeal document discussing significant policy issues around direct listing norms and investor protection for shareholders in defunct regional exchanges. Medium impact due to concerns about thousands of companies and lakhs of investors affected by exchange closures.