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CS Executive · Capital Market and Securities Laws · Delisting of Equity Shares

Which of the following best describes voluntary delisting, as distinguished from compulsory delisting, of equity shares under SEBI's delisting framework?

Voluntary delisting is where the promoter or acquirer takes the initiative to delist the company's shares and gives public shareholders an exit offer. In compulsory delisting, by contrast, the stock exchange removes the shares because of the company's non-compliance with listing requirements.

  1. AThe stock exchange removes the shares because the company has breached listing requirements
  2. BThe promoter or acquirer chooses to delist the company's shares through an exit offer to public shareholdersCorrect
  3. CSEBI cancels the company's registration as a body corporate
  4. DThe company's shares are moved to a different segment of the same exchange

Explanation

In voluntary delisting, the promoter or acquirer takes the initiative and offers an exit to public shareholders. Removal by the exchange for non-compliance is compulsory delisting. Cancelling registration or moving segments is not delisting.

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