All listed companies have to maintain the mandatory security deposit with the stock exchanges as per regulations. The Securities and Exchange Board of India has asked all stock exchanges to take necessary steps to ensure necessary compliance by the listed companies. As per regulations, all listed companies are required to keep one per cent of money collected from public shareholders, with the exchanges, as security deposit. 50 per cent of deposits should be in cash while the remaining balance can be in the form of bank guarantee. All listed companies are also asked to renew their expired bank guarantees as soon as possibl, to ensure proper handling of complaints of investors.
SEBI asked through a circular that companies are not allowed to adjust the security deposit against any dues payable to the exchanges. No-objection certificate would be issued to the companies only after clearing all dues. SEBI also asked all stock exchanges to develop a mechanism to timely intimate the companies about renewal of bank guarantees.
The Board is not happy with the companies which make huge profits through IPOs and rights issues but do not act according to regulations laid down by market regulator.