The Securities and Exchange Board of India (“SEBI”) has issued draft circular on modification to chapter VII of the Master Circular for Listing Obligations and Disclosure Requirements (LODR) for Non-Convertible Securities, Securitized Debt Instruments and Commercial Paper. Public comments are invited till May 30, 2025. With the draft circular, SEBI aims to streamline the following formats for Secretarial Compliance Report, Corporate Governance Report and Disclosure of Related Party Transactions (RPTs) by High Value Debt Listed Entities (HVDLEs).

Following are the key proposals:

1. Streamlining of below mentioned formats:

1. 1. Format of Annual secretarial compliance Report specified in Annexure-A.
   2. Periodic Compliance report (Part I to IV) as specified in Annexure-B.
      1. Part I: on quarterly basis
      2. Part II: at the end of the financial year
      3. Part III: at the end of 6 months from the close of financial year
      4. Part IV: on a half yearly basis
   3. Format of disclosure of related party transactions as specified in Annexure-C.
2. Additionally, the draft circular has also specified the information (as mentioned below) to be placed before the audit committee, Debenture Trustee and the shareholders for consideration of RPTs.
   1. Information to be reviewed by the Audit Committee for approval of RPTs and by Debenture Trustee for providing No-objection certificate for RPTs:
      1. Type, material terms and particulars of the proposed transaction.
      2. Name of the related party and its relationship with the listed entity or its subsidiary, including nature of its concern or interest (financial or otherwise).
      3. Tenure of the proposed transaction (particular tenure shall be specified).
      4. Value of the proposed transaction.
      5. Others as specified in the draft circular.
   2. The audit committee shall also review the status of long-term (more than one year) or recurring RPTs on an annual basis.
   3. Following are the information to be provided to the shareholders for consideration of RPTs:
      1. A summary of the information provided by the management of the listed entity to the audit committee.
      2. Justification for why the proposed transaction is in the interest of the listed entity.
      3. Where the transaction relates to any loans, inter-corporate deposits, advances or investments made or given by the listed entity or its subsidiary.
   4. The explanatory statement contained in the notice sent to the shareholders for seeking approval for an RPT shall provide relevant information so as to enable the shareholders to take a view whether the terms and conditions of the proposed RPT are not unfavourable to the listed entity, compared to the terms and conditions, had   similar transaction been entered into between two unrelated parties.

The comments/suggestions may be provided through the following modes:

1. Online Submission: Comments can be submitted through SEBI’s web-based public comments form: Click here to provide comments.
2. Email Submission: In case of technical issues, comments can be emailed with the subject ” Modification to Chapter VII of the Master Circular for listing obligations and disclosure requirements for Non-Convertible Securities, Securitized Debt Instruments and/ or Commercial Paper.” to:
   a) Rohit Dubey, GM (rohitd@sebi.gov.in)
   b) Kiran Dhembre (Ms.), Mgr (kirand@sebi.gov.in)

The draft circular is hyperlinked below, for your ease of reference.

Source: SEBI

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