SEBI notifies amendments to the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015

The Securities and Exchange Board of India (SEBI), on May 09, 2018, has notified the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018.

Some of the major amendments made in the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 are:

·         In Regulation 17 (1), in clause (a), the following proviso shall be inserted:

“Provided that the Board of directors of the top 500 listed entities shall have at least one independent woman director by April 1, 2019 and the Board of directors of the top 1000 listed entities shall have at least one independent woman director by April 1, 2020;”

·         In Regulation 17 (1), after the existing clause (b), the following new clause shall be inserted, namely,-

“(c) The board of directors of the top 1000 listed entities (with effect from April 1, 2019) and the top 2000 listed entities (with effect from April 1, 2020) shall comprise of not less than six directors.”

·         In Regulation 17 (1), after the existing sub-regulation (1), the following new sub-regulation shall be inserted, namely,-

“(1A) No listed entity shall appoint a person or continue the directorship of any person as a non-executive director who has attained the age of seventy five years unless a special resolution is passed to that effect, in which case the explanatory statement annexed to the notice for such motion shall indicate the justification for appointing such a person.”

·         After the existing Regulation 17, the following new Regulation “17A. Maximum number of directorships shall be inserted.

·         In Regulation 19, after the existing sub-regulation (2), the following new sub-regulation shall be inserted, namely,-

“(2A) The quorum for a meeting of the nomination and remuneration committee shall be either two members or one third of the members of the committee, whichever is greater, including at least one independent director in attendance.”

·         In Regulation 20, after the existing sub-regulation (2), the following new sub-regulation shall be inserted, namely, -

“(2A) At least three directors, with at least one being an independent director, shall be members of the Committee.”

·         Regulation 24(1) shall be substituted with the following, namely, -

“(1) At least one independent director on the board of directors of the listed entity shall be a director on the board of directors of an unlisted material subsidiary, whether incorporated in India or not.

·         After the existing Regulation 24, the following new Regulation shall be inserted, namely,-

“24A. Secretarial Audit. Every listed entity and its material unlisted subsidiaries incorporated in India shall undertake secretarial audit and shall annex with its annual report, a secretarial audit report, given by a company secretary in practice, in such form as may be specified with effect from the year ended March 31, 2019.”

·         In Regulation 32, after the existing sub-regulation (7), the following new sub-regulation shall be inserted, namely, -

“(7A) Where an entity has raised funds through preferential allotment or qualified institutions placement, the listed entity shall disclose every year, the utilization of such funds during that year in its Annual Report until such funds are fully utilized.”

·         In Regulation 33(3), after the existing clause (f), the following new clauses shall be inserted, namely, -

“(g) The listed entity shall also submit as part of its standalone and consolidated financial results for the half year, by way of a note, statement of cash flows for the half-year.

(h) The listed entity shall ensure that, for the purposes of quarterly consolidated financial results, at least eighty percent of each of the consolidated revenue, assets and profits, respectively, shall have been subject to audit or in case of unaudited results, subjected to limited review.

The listed entity shall disclose, in the results for the last quarter in the financial year, by way of a note, the aggregate effect of material adjustments made in the results of that quarter which pertain to earlier periods.”

Save as otherwise specifically provided for in these regulations, they shall come into force with effect from April 1, 2019.

[Notification No. SEBI/LAD-NRO/GN/2018/10]

URL: https://www.sebi.gov.in/legal/regulations/may-2018/sebi-listing-obligations-and-disclosure-requirement-amendment-regulations-2018_38898.html