SEBI Circular on System-driven Disclosures in Securities Market

May 30, 2018 | by Avantis RegTech Legal Research Team

Secretarial Compliance

The Securities and Exchange Board of India (SEBI), vide Circular CIR/CFD/DCR/17/2015dated December 01, 2015, had introduced system-driven disclosures in securities market detailing the procedure to be adopted for its implementation with effect from January 01, 2016.

The procedure was further streamlined vide SEBI Circular CFD/DCR/CIR/2016/139 dated December 21, 2016.

As specified in SEBI circular dated December 01, 2015, the system is being implemented in phases and in the first phase, the disclosures of promoter/promoter group under SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (SAST Regulations) and SEBI (Prohibition of Insider Trading) Regulations, 2015 (PIT Regulations) have been implemented.

The SEBI has now proposed to implement the next phase of the system which shall pertain to the following additional disclosures:

a.       Disclosures under Regulation 29(1) and 29(2) of SAST Regulations by non-promoters.

b.      Disclosures under Regulation 7(2) of PIT Regulations pertaining to directors and employees of the company.

The CEO and up to two levels below CEO of a company shall be deemed as employees for the purpose of system-driven disclosures in respect of Regulation 7(2) (b) of PIT Regulations. For the purpose of system driven disclosure, the requirement specified under Regulation 29(4) of SAST Regulations shall not be applied to a scheduled commercial bank or public financial institution as pledgee irrespective of whether such a pledge is for securing indebtedness in the ordinary course of business or not.

The procedure required for implementation of the aforesaid disclosures is provided at Annexure-A.

The system would continue to run in parallel with the existing system i.e. the entities shall continue to comply with the disclosure obligations under SAST Regulations and PIT Regulations as applicable to them.

The Depositories and Stock Exchanges shall make necessary arrangements so that the aforesaid disclosures pertaining to SAST Regulations and PIT Regulations are disseminated on the websites of respective stock exchanges from August 01, 2018. Other requirements of SEBI circulars dated December 01, 2015 and December 21, 2016 on the same subject will remain in force.

[Circular SEBI/HO/CFD/DCR1/CIR/P/2018/85]



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