SEBI amends LODR Regulations to allow appointment of an independent director without requisite majority of votes, extend Scheme of Arrangement to more entities

The Securities and Exchange Board of India (“SEBI”) has notified the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Sixth Amendment) Regulations, 2022 amending the provisions of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“LODR Regulations”). The amendment allows appointment of an independent director without requisite majority of votes and revise the timeline for submitting un-audited or audited quarterly and year to date standalone financial results in the last quarter.

Key Highlights of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Sixth Amendment) Regulations, 2022:

1. An independent director can now be appointed even when they fail to get the requisite majority of votes provided the votes cast in favour of the resolution exceed the votes cast against the resolution.
2. For the last quarter of the financial year, the listed entity must submit un-audited or audited quarterly and year to date standalone financial results within sixty days from the end of the quarter to the recognised stock exchange(s).
3. The disclosures to be made while submitting quarterly / annual financial results have been modified to include operating margin percent and net profit margin percent.
4. A statement indicating the utilization of issue proceeds of non-convertible securities must be filed along with the quarterly financial results.
5. Listed entities that are not companies must deposit any amount in the escrow account that remains unclaimed for seven years to the Investor Protection and Education Fund.
6. Now listed entities that have listed non-convertible debt securities or non-convertible redeemable preference shares can undertake Scheme of Arrangement.

Source: Securities and Exchange Board of India