SEBI CorporateLaw

8/19/2019 SEBI CorporateLaw

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INTRODUCTION OF SEBI (LISTING OBLIGATIONS

AND DISCLOSURE REQUIREMENTS)

REGULATIONS,2015

Listing Reg!"ti#ns $"s t%# &#!' #e*ti+e Ti-e S."n

#& /0 '"s

&#

i-.!e-ent"ti#n



The following Two Provisions of the Listing Regulations areapplicable with immediate effect which are as follows:



MAIN HIGHLIGHTS



Regulation 9:

Preservation of Documents

The listed company is required to formulate a policy for preservation of documents duly

approved by the Board of Directors, classifying them in at least two categories as follows-

documents whose preservation shall be permanent in nature;

documents with preservation period of not less than eight years

after completion of the relevant transactions.

(Maintenance of documents in electronic mode will be deemed to be complyingwith the aforesaid regulation.)

This Regulation is, to some extent, in line with the provisions of

Companies Act, 20! an" ensures #etter governance

in the operations of the compan$%



Every listed company is required to comply with the following:

To get itself registered on the !"#E platform or any other similar platform to

electronically handle the investor complaints as specified by the Board.

To file a St"te-ent %it$in 21 '"s &#- t$e en' #& t$e e!e+"nt "te to the stoc$

e%change pertaining to the status of investors complaints detailing the following

information:

• &o. of !omplaints 'ending:• pending at the beginning,

• #eceived and disposed of during the quarter,

• (nresolved at the end of the quarter)

The said statement is also required to be placed before the Board of Directors on a quarterly

basis.

Regulation !:

&rievance Re"ressal 'echanism

*n the erstwhile +isting greement, the information pertaining to pending investors

complaints were being submitted on a quarterly basis only along with the inancial #esults

required to be filed with the stoc$ e%change within /012 days 3as the case may be4 from the

end of the relevant quarter.

N e w

E a r l i e r



I-.#t"nt 3#+isi#ns e!"ting t# Re!"te' 3"t T"ns"*ti#n (R3T)

ee$ approval from shareholders in 5eneral 6eeting by passingan ordinary resolution for

approving material related party transactions sub7ect to the stipulation that such related partiesshall be abstained from voting on such resolution.

Regulation 23

Related Party Transaction

(ith the intent to harmoni)e the provisions with the Companies Act, 20!,

the re*uirement of sharehol"er approval for material relate"

part$ transaction has #een relaxe" from +pecial Resolution to

r"inar$ Resolution%

E a r l i e r S.e*i"! Res#!ti#n %"s eie'



Regulation 29:

Prior -ntimations

T$e !iste' *#-."n is eie' t# gi+e .i# inti-"ti#n t# St#*4 E*$"nge "#t t$e

B#"' Meeting $e!', &#- ti-e t# ti-e in t$e &#!!#%ing -"nne

For Financial

Results

For alteration in the date of payment of

interest or nomenclature of the specified

securities

For Corporate

Actions

At least days

"'+"n*e

n#ti*e!e"cluding the

date of intimation and

date of meeting 4

before consideration

of inancial #esults of

the company.

At least # wor$ing days "'+"n*e n#ti*e

!e"cluding the date of

intimation and date of

meeting 4 for considering

the proposals related to

buybac$ of securities,

voluntary delisting, fund

raising including

determination of issue

price.

At least %% wor$ing days &advance notice for

considering the proposals pertaining to:

a. !hange in nomenclature of any of the securities

listed on the toc$ E%change)

b. lteration in the date on which,

•the interest is required to be paid on

debentures or bonds)• the redemption amount is required to be paid on

redeemable shares or debentures or bonds.

E a r l i e r

at least ' clear calendar

days advance notice

!e"cluding the date of

intimation and date of

meeting 4

at least #% advance notice was re(uired E a

r l i e r



Regulation !0:

Disclosure of .vents or -nformation%T$e -"in $ig$!ig$ts #& t$e Reg!"ti#ns "e #t!ine' "s &#!!#%s

The responsibility is casted on the Board of listed entities, to authori8e one or more 96's for the purpose of determining

materiality of an event or information and ma$ing disclosures to the stoc$ e%change.

The +isted Entity is required to frame a Policy For )etermination *f +ateriality *f ,vents, duly approved by the Board ofDirectors of such entity.

The criteria for determining the materiality of events-information is prescribed in the regulation and they are narrated as below:

a4 the omission of an event or information, which is li$ely to result in discontinuity or alteration of event or information alreadyavailable publicly) or

b4 the omission of an event or information is li$ely to result in significant mar$et reaction if the said omission came to light at a later

date) or

c4 *n case where the criteria specified in sub-clauses 3a4 and 3b4 are not applicable, an event0information may be treated as beingmaterial if in the opinion of the board of directors of listed entity, the event 0 information is considered material.



'ost / years, the requirement of disclosure of such events is as per the

archival policy of the +isted !ompany.

ny delay in filing disclosures beyond the timeframe of hours shall be

accompanied by an e%planation for delay.

ll events or information of material subsidiaries are to be disclosed by

such listed entity.

The details of above stated authori8ed 96's is required to be disclosed to

the toc$ E%change3s4 as well as on the !ompany;s website.

6-"tei"! ssi'i"7 shall mean a subsidiary, whose income or net

worth e%ceeds twenty percent of the consolidated income or net worth

respectively, of the listed entity and its subsidiaries in the immediately

preceding accounting year.



6aterial event0 information are needed to be disclosed as per the followingtimeline:

• .ithin #/hours from the occurrence of the events as specified in 'art - of

chedule *** of the said regulations.• .ithin 01minutes of the conclusion of the Board 6eeting regarding events

specified in sub- para of 'ara of 'art of chedule *** of the saidregulations.

Every +isted !ompany is required to update material developments on a

regular basis pertaining to the disclosures made till the event is resolved0closed and host the said events along with all updated information on itswebsite at least for a period of / years.

The listed company is required to update any change in the content of its

website within wor$ing days from the date of such change in the content.

The provisions of this Regulation have remove" all the am#iguities of

Clause !/ of the erstwhile isting Agreement an" a""ition of provisions relate" to

explanation for "ela$ in "isclosure woul" surel$ #ring more transparenc$ in the

#usiness affairs of the Compan$%



Regulation !1A

Disclosures of Class of +harehol"ers an"

Con"itions 3or Reclassification

The toc$ E%change may allow for reclassification upon receipt of a request from the listed

company or the concerned shareholder, along with requisite evidence. The reclassificationwill be allowed sub7ect to compliance of specified conditions.

*. #eclassification of 'romoter as 'ublic hareholder

<hen a new promoter replaces the previous promoter subsequent to an open offer or in

any other manner, re-classification shall be permitted sub7ect to "..#+"! #&s$"e$#!'es in t$e gene"! -eeting8

hareholders need to specifically approve whether the outgoing promoter can hold any

96' position in the company. *n any case, the #tg#ing .#-#te *"nn#t "*t "s

9M3 &# " .ei#' #& -#e t$"n : e"s &#- t$e '"te #& s$"e$#!'es; "..#+"!.

. In *"se #& *$"nge in 3#-#te



T$e #tg#ing .#-#te "!#ng %it$ t$e .#-#te g#. "n' .es#ns "*ting in

*#n*et *"nn#t $#!' -#e t$"n 10< #& t$e ."i'=. eit s$"e *".it"! of the

company and shall not have any special rights through any formal or informal

arrangements.

*n case of transmission0succession0inheritance, the inheritor shall be classified as

promoter.

E%isting promoters may be re-classified as public in case the company becomes professionally

managed and does not have any identifiable promoter sub7ect to the"..#+"! #& s$"e$#!'es in" gene"! -eeting. company will be considered as professionally managed for this purpose, if:

N# .es#n # g#. "!#ng %it$ 3es#ns A*ting in C#n*et (3ACs) t"4en t#get$e

$#!'s -#e t$"n 1< #& t$e ."i'=. eit s$"e *".it"! of the company 3including

any convertibles0outstanding warrants0D#05D# =olding4.

23 4n case of 4nheritance:

C3 4n case of Company not having any identifiable promoter:



6utual unds0Ban$s0*nsurance !ompanies0inancial *nstitutions0'*s can each hold

up to >2? of the paid-up equity share capital of the company 3including any

convertibles0outstanding warrants0D#05D# =olding4.

Erstwhile promoters and their relatives may hold 96' position in the company onlysub7ect to shareholders; approval and for a period not e%ceeding @ years from the

date of shareholders; approval.

The outgoing promoter shall not have any special rights through any formal or

informal arrangements.

The outgoing promoter shall not, directly or indirectly, e%ercise control over the

affairs of the company.

*ncrease in public shareholding pursuant to re-classification of promoters shall not

be counted towards achieving compliance with minimum public shareholding 36'4

requirement under clause 2 of equity listing agreement.

The event of re-classification may be disclosed as a material event in accordance

with the listing agreement0regulations.

)3 *ther Conditions:



EB* may rela% any condition for reclassification in specific cases, if it is satisfiedabout non-e%ercise of control by the outgoing promoter or its person acting in concert.

II8 Re*!"ssi&i*"ti#n #& 3!i* S$"e$#!'e "s " 3#-#te

Then 'ublic shareholder is required to ma$e an open offer in accordance with the

provisions of EB* 3T4 #egulations, 2>>.

, Power to rela" the provisions on a case to case basis

To resolve the am#iguities as to re classification, +.4- has inserte" this

regulation to place a regulator$ framewor5 for re6classification of

promoters in liste" companies as pu#lic sharehol"ers

un"er various circumstances%



Regulation !7

Annual -nformation 'emoran"um

The annual *nformation 6emorandum is needed to be submitted by thelisted entities to the stoc$ e%change, in the manner as may be specified by

EB* from time to time.

SEBI has proposed the format of AnnualInformation Memorandum in its Discussion

paper



SECRETARIAL STANDARDS 5etting grounds for Corporate 6overnance

SecretarialStandardsEfective rom July 01,2015



Bie& >ig$!ig$ts #& SS =1



Bie& >ig$!ig$ts #& SS = 2



E?EM3TIONS TO 3RI@ATE COM3AN

!vide notification no3 65R //7 !,8 dated 3173#1% 8

9E >IG>LIG>TS

De&initi#n #& e!"te' ."t 95ection #!'78

The transaction done between a private company and following companies noted below is out of the purview of the Related party transaction referred to u/s 188

• Holding Company

• Subsidiary Company

• Associate Company

• Subsidiary of the Holding Company to which it is also a Subsidiary

N#% " .i+"te *#-."n *"n #&&e s$"es t# e-.!#ees n'e t$e s*$e-e #& e-.!#ee;s st#*4 #.ti#n %it$ "n

#'in" es#!ti#n inste"' #& " s.e*i"! es#!ti#n8 95ection 7#!%8 !b8

3i+"te C#-."n *"n "**e.t &#- its -e-es 'e.#sit .t# (."i' . s$"e *".it"! &ee ese+es ) %it$#t

*#-.!ing %it$ t$e *#n'iti#ns #& 9 section '0 !#8 !a8 to !e8

a! issuance of circular

b! "iling of circular with #CA

c! #aintaining $eposit repayment reserved! %rovide deposit insurance etc as prescribed u/s &' (! a! to e!



.8.'PT-+ T PR-AT. C'PA;

(vide notification no. GSR 446 (E) dated 5.06.2015 )

contd

&ow there is no need to file orm 65T-> for the purposes of resolution passed u0s >A

read with #ule C of the !ompanies 36eeting of Board and its power4 #ules, 2>.95ection %%' !08 !g8

The provisions relating to giving notice of > days along with the deposit of #s. > la$h etc.

for contesting for directorship shall not be applicable on private companies 9section%71

t a general meeting of a private company, the motion of appointment of more than onedirector can be made by a single resolution 95ection %7#



.8.'PT-+ T PR-AT. C'PA;

1vi"e notification no% &+R <</ 1. "ate" 7%0/%207 6

cont"

n interested director can now participate in the Board 6eeting in which he is interested

sub7ect to a condition that he discloses his interest in such contract or arrangement.95ection %/ !#8

+oan to Director are allowed for private companies which not falls in the criteria as prescribed 95ection %

member even after being related party, is allowed to vote on special resolution passed

u0s >CC 3>4 of the ct. 95econd proviso of section %!%8

&ow there is no need to pass resolution for appointment of managing director , whole timedirector or manager u0s >1 of the ct and no need to comply with chedule of the ct.

95ection %<7 !/8 = !8

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