CHANGES TO THE LISTING OBLIGATIONS AND DISCLOSURE REGIME IN INDIA – ANALYSIS OF THE SEBI (LODR) SECOND AMENDMENT REGULATIONS, 2015 – Eshwars
Call Us +91 44 42048335

CHANGES TO THE LISTING OBLIGATIONS AND DISCLOSURE REGIME IN INDIA – ANALYSIS OF THE SEBI (LODR) SECOND AMENDMENT REGULATIONS, 2015

Authored by Lalitha Karuna. 

SEBI at its board meeting held on 25th March 2021 had approved several amendments to SEBI Regulations, some of which were covered by us in our All Things Listed Issue of April 2021. The amendments approved specifically to SEBI (LODR) Regulations, 2015 at the meeting was listed out by us in our article.

Subsequently, SEBI vide its notification No. SEBI/LAD-NRO/GN/2021/22 dated 05th May 2021 issued Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Second Amendment) Regulations, 2021 which inter alia provides for amendments apart from those that were listed out in the Board Meeting Outcome. It may be interesting to note that the outcome document cautiously used the words “Some of the key amendments are as follows” in Para V.1.

Listed below are those Amendments to the SEBI (LODR) Regulations, 2015 apart from those that were covered earlier:

Regulation Prior to 05.05.2021 Post Amendment Effect of the Amendment
2(zn) Nil SEBI has introduced a definition for ‘Working Day’ to mean working days of the stock exchange where the securities of the entity are listed. Clarification is given to the stakeholders regarding the terminology ‘Working Day’.
Regulation 7(3) Compliance Certificate from Compliance Officer and Authorized Representative of the RTA that share transfer facility are maintained either in-house or with the RTA to be submitted to the Stock Exchange within thirty days from the end of each half year. Compliance Certificate from Compliance Officer and Authorized Representative of the RTA that share transfer facility are maintained either in-house or with the RTA to be submitted to the Stock Exchange within thirty days from the end of each financial year. What was earlier half-yearly compliance has been amended to be an annual compliance.
Regulation 25(3) Independent Directors meeting without the presence of non-independent directors was required to be held once in a year. Independent Directors meeting without the presence of non-independent directors is required to be held once in a financial year. Schedule IV, Para VII of the Companies Act, 2013 mandates the ID Meeting to be held once in a ‘financial year’. This Amendment to Regulation 25(3) streamlines compliance between LODR and CA13.
Regulation 44(3) Details regarding the voting results of General Meeting were to be submitted to the Stock Exchange within 48 hours of conclusion of the General Meeting. Details regarding the voting results of General Meeting are to be submitted to the Stock Exchange within 2 Working Days of conclusion of the General Meeting. This Amendment has provided more clarity to the submission of Voting Results.

Considering a scenario wherein the GM concluded on Friday at 04.30 PM, the earlier requirement was to submit the results within Sunday, 04.29 PM. Now that the “Working Day” concept has been introduced. In our scenario the results will have to be submitted by the following Tuesday.

Regulation 46(2) Earlier, website disclosures were required to be made by Listed entities in their website. The lists of items were provided in Regulation 46(2). Website disclosures are to be made by Listed entities in a separate section of their website. Also, the lists of items to be disclosed have undergone a change. (*) This amendment has brought in a requirement that listed entities are to maintain their website disclosures in a separate section.
Regulation 34 (3) read with Schedule V Earlier details of Audit Committee, Nomination and Remuneration Committee and Stakeholder Relationship Committee were to be given in the Corporate Governance section of the Annual Report. Now, the details of Risk Management Committee are also to be given. Details include

·       the terms of reference,

·       composition,

·       name of chairperson,

·       members,

·       meetings and

·       attendance during the year.

This Amendment provides for a more robust mechanism for risk management.

(*) – Changes in the list of items to be disclosed on the website of the listed entity:

1. The schedule of analysts and institutional investors meet, and presentations made by the listed entity to them. The term ‘meet’ has been clarified to include group meetings or group conference calls conducted physically or through any digital means.

2. Audio or video recordings and transcripts of post earnings/quarterly calls, by whatever name called, conducted physically or through digital means, simultaneously with submission to the recognised stock exchange(s), in the following manner:

(i) the presentation and the audio/video recordings shall be promptly made available on the website and in any case, before the next trading day or within twenty-four hours from the conclusion of such calls, whichever is earlier.

(ii) the transcripts of such calls shall be made available on the website within five working days of the conclusion of such calls.

3. If a listed entity has a subsidiary incorporated outside India and

a) where an overseas subsidiary is statutorily required to prepare consolidated financial statement, the listed company can place on its website, the consolidated financial statement of such subsidiary

b) where an overseas subsidiary is not required to get its financial statement audited and it also doesn’t get its financial statement audited, the listed entity may place the unaudited financial statement on its website. If the financial statement is not in English, an English translated copy should also be placed on the website.

4. Secretarial compliance report.

5. Disclosure of the policy for determination of materiality of events or information required

6. Disclosure of contact details of key managerial personnel who are authorized for the purpose of determining materiality of an event or information and for the purpose of making disclosures to stock exchange(s).

7. Disclosures under sub-regulation (8) of regulation 30 of these regulations.

8. Statements of deviation(s) or variation(s).

9. Dividend distribution policy by listed entities based on market capitalization.

10. Annual return as provided under section 92 of the Companies Act, 2013 and the rules made there under.

Leave a comment

Your email address will not be published. Required fields are marked *

Eshwars | House Of Corporate & IPR Laws,
Chennai | Delhi | Bengaluru | Mumbai | New Jersey

Board: +91 - 44 - 42048335
+91 - 44 - 42048235