Section 22A of SCRA : Section 22A: Right Of Appeal To Securities Appellate Tribunal Against Refusal Of Stock Exchange To List Securities Of Public Companies

Explanation using Example

Imagine that XYZ Tech Ltd. is a public company that wants its shares to be listed on the National Stock Exchange (NSE). The company submits all necessary documents and follows the due process for listing. However, the NSE, after reviewing the application, decides not to list XYZ Tech Ltd.'s securities, citing certain reasons which the company believes are unjustified.

According to Section 22A of The Securities Contracts (Regulation) Act, 1956, XYZ Tech Ltd. is entitled to receive a detailed explanation from the NSE regarding the refusal. Upon receiving the reasons, if XYZ Tech Ltd. is not satisfied, it can appeal to the Securities Appellate Tribunal (SAT) within 15 days from the date the reasons were furnished.

In this scenario, if XYZ Tech Ltd. decides to appeal, they must ensure that their appeal is in the prescribed form and accompanied by the required fee. The SAT will then review the case, giving NSE a chance to present its side. The SAT has the power to overturn the NSE's decision, or in cases where the NSE failed to make a timely decision, the SAT may directly grant or refuse the permission to list the securities.

The SAT aims to handle the appeal efficiently, with a goal to resolve the matter within six months. Once the SAT reaches a decision, it will communicate the order to both the NSE and XYZ Tech Ltd., and the NSE will be required to act in accordance with the SAT's orders.