Authored by Praveen Pandian
Earlier in December 2020, SEBI had issued a consultation paper regarding Risk Management Committee which we had summarized here. SEBI at its Board Meeting dated 25th March 2021 approved the following amendments to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 in relation to applicability, constitution and role of the Risk Management Committee of listed entities.
Applicable Regulation: Regulation 21 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 deals with Risk Management Committee.
| Subject | Existing Law | Approved Amendment |
| Applicability | Top 500 listed entities based on market capitalization. | Top 1000 listed entities based on market capitalization. |
| Composition | Majority members from the Board of directors. | Minimum of three members where majority of them being member of the board of directors, including at least one independent director. |
| Quorum | No specific provisions for quorum were prescribed. | Two members or one third of the members of the committee, whichever is higher, with at least one director in attendance. |
| Role | As defined and delegated by the Board including reviewing risk management plan. | In addition to the existing role the Committee is also tasked with formulation of risk management policy, monitoring and reviewing its implementation; review of the appointment, removal and terms of remuneration of Chief Risk officer (if any). |
