The Securities and Exchange Board of India (“SEBI”) has implemented recommendations from its Expert Committee aimed at facilitating ease of doing business for listed entities. Through a recently issued Circular, SEBI has amended provisions of SEBI Master Circular (“Master Circular”) dated 11th November, 2024 concerning compliance with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“LODR”) by listed entities.
Key Highlights:
1. SEBI has introduced an Integrated Filing system under Regulation 10(1A) of the LODR Regulations, applicable from the quarter ending 31st December, 2024. The format of quarterly Integrated Filing i.e., Integrated Filing (Governance) and Integrated Filing (Financial) is given in Annexure 1 to this circular. The following Governance filings are now to be done within 30 days of the end of the quarter:
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- Statement on redressal of investor grievances
- Compliance Report on Corporate Governance
The following Financial related filings are now to be done within 45 days of the end of the quarter and 60 days from end of the last quarter & financial year:
- Disclosure of Related Party Transactions (Frequency – Half yearly)
- Quarterly disclosure of outstanding default on loans / debt securities
- Statement of Deviation and Variation
- Financial results
2. The listed entities will now be required to disclose the following material events / information on a quarterly basis in the format specified as part of the Integrated Filing (Governance):
- acquisition of shares or voting rights (aggregating to 5% or subsequent change in holding exceeding 2%) in an unlisted company,
- imposition of any fine or penalty lower than the prescribed monetary thresholds and
- updates on ongoing tax litigations or disputes on a quarterly basis.
3. The details of ratification of Related Party Transactions (“RPTs”) are required to be disclosed along with the half-yearly disclosures of RPTs;
4. As per Regulation 24A(1A) of the LODR Regulations, a Secretarial Auditor of a listed entity must be a Peer Reviewed Company Secretary and free from disqualifications specified by SEBI in Annexure 2 of the Circular.
5. Regulation 24A(1B) further prohibits Secretarial Auditors from providing certain services, as outlined in Annexure 3.
6. The listed entity shall upload the Employee Benefit Scheme Documents on its website for disclosing the Scheme after obtaining shareholder approval. This scheme document must mandatorily have minimum information as per SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 along with the rationale for redacting information and justification as to how such redacted information would affect competitive position or reveal commercial secrets of the listed entity and shall be placed before the board of directors for consideration and approval.
7. Stock Exchanges will specify the process, procedure, and timelines for system driven disclosure of the filing / disclosure requirements such as Shareholder Pattern and New rating (s) or revision in ratings applicable to listed entities under the LODR Regulations.
8. Changes have been carried out to the provisions of the Master Circular as detailed in Annexure 4 of the circular.
Key changes to the Master Circular include the following:
- The formats for corporate governance report, financial results, statement of deviation, RPT etc. have been deleted as relevant formats have been incorporated in Annexure 1 of this circular as part of the new Integrated Filing.
- Introduction of fines for non-compliance with the timelines specified in regulation 31A(3)(a) of the LODR for reclassification of promoter / promoter group entity as public.
- Changes to the provisions relating to Group Governance Unit to bring in clarity.
- Annexure 18A of the Master Circular on timelines for disclosure of material events /information shall stand substituted by Annexure 5 to this circular.
The Circular is linked below for ease of reference.
Source: Securities and Exchange Board of India
