Slew of measures from SEBI in response to COVID-19
List of reliefs summarized
Shaifali Sharma
While ensuring that companies remain compliant during the current battle with COVID-19, several temporary measures are being provided by various regulators every other day since lockdown. The measures announced would support companies and other industrial bodies to function and meet the timelines in the period of lockdown.
The Capital Market Regulator SEBI has also lined up a slew of relaxations for the listed entities amid COVID-19 crises. The list of all the relevant circulars in this regard, recapitulating the requirement of law, original timelines and the relaxations granted by the SEBI are summarized in this article, pertaining to the following Regulations:
- SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
- SEBI SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011
- SEBI (Depository and Participants) Regulations, 2018
- SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009
- SEBI (Buy-back of Securities) Regulations, 2018
I. SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015[1]
| Sr.
No. |
Regulation /Circular | Particulars | Requirement/Frequency of filing | Original Due Date | Extended Date | Relaxation period | |
| Relaxations on holding AGM by top 100 listed entities vide circular dated April 23, 2020 | |||||||
| 1 | 44(5) | Holding AGM within a period of five months | Top 100 listed entities by market capitalization, (determined as on 31st March of every FY), shall hold their AGMs within a period of 5 months from the date of closing of the FY | For companies whose FY ends on March 31, 2020 – 31-Aug-20 | 30-Sep-20 | 1 month | |
| For companies whose FY ends on December 31, 2020 – 31-May-20 | 30-Sep-20 | 4 months | |||||
| Relaxations/Clarification vide circular dated April 17, 2020 | |||||||
| 2 | 29(2) | Prior Intimations | Prior intimation about meetings of the board (excluding the date of the intimation and date of the meeting): a. at least 5 days before the meeting if financial results are to be considered; b. 2 working days in other cases |
– | – | Prior intimation of 5 days / 2 working days reduced to 2 days, for board meetings held till July 31, 2020 | |
| 3 | 39(3) | Intimation to Stock Exchanges regarding loss of share certificates and issue of the duplicate certificates | Within 2 days of its getting information | Any delay beyond the stipulated time will not attract penal provisions laid down vide SEBI circular dated May 03, 2018 wrt Non-Compliance with provisions of SEBI LODR | Relaxation is for intimations to be made between March 1, 2020 to May 31, 2020 | ||
| 4 | 52(8) | Newspaper publication of financial results | Within 2 calendar days of the conclusion of the meeting of the board of directors | – | – | No advertisement publication in newspaper required for events taking place up to May 15, 2020 | |
| 5 | – | Clarification regarding the use of digital signatures | – | Authentication /certification of any filing /submission made to stock exchanges under LODR may be done using digital signature certifications until June 30, 2020 | |||
| Relaxations vide SEBI circular dated March 26, 2020 | |||||||
| 6 | 40(9) | Certificate from Practicing Company Secretary on timely issue of share certificates. | Half Yearly(1 month of the end of each half of the financial year) | 30-Apr-20 | 31-May-20 | 1 month | |
| 7 | 44(5) | Holding of AGM by top 100 listed entities by market capitalization for FY 19-20. | Annual (Within a period of 5 months from the date of closing of the financial year) | 31-Aug-20 | 30-Sep-20 | 1 month | |
| 8 | 19(3A) | The Nomination and Remuneration Committee shall meet at least once in a year. | Yearly | 31-Mar-20 | 30-Jun-20 | 3 months | |
| 9 | 20(3A) | The Stakeholders’ Relationship Committee shall meet at least once in a year. | |||||
| 10 | 21(3A) | The Risk Management Committee shall meet at least once in a year. | |||||
| 11 | SEBI circular dated January 22, 2020 | Relaxation of the operation of the SEBI circular on Standard Operating Procedure dated January 22, 2020 | – | For compliance periods ending on or after March 31, 2020. | For compliance periods ending on or after June 30, 2020. | 3 months | |
| 12 | 47 | Publication of advertisements in the newspaper.
Exemption from publication of advertisements in newspapers as required under regulation 47 for all events scheduled till May 15, 2020. |
As provided under Regulation 47 | – | – | No advertisement publication in newspaper required for events taking place up to May 15, 2020 | |
| Relaxations vide SEBI circular dated March 23, 2020 | |||||||
| 13 | SEBI circular dated October 29, 2013, October 22, 2019 and December 24, 2019 | Public issue of debt securities/ preference shares or listing of commercial papers | Companies proposing public issue of debt securities/ preference shares or listing of commercial papers are required to submit audited financial statements which are not older than 6 months.
Relaxation -Companies can issue debt securities or preference shares/ list commercial papers based on the financials as on September 30, 2019 up to the extended date. |
31-Mar-20 | 31-May-20 | 60 days | |
| 14 | SEBI circular dated 26.11.2018 | Disclosure of Large Corporate entities
a. Initial disclosure |
Initial Disclosure – within 30 days from the beginning of financial year | 30-Apr-20 | 30-Jun-20 | 45 days | |
| b. Annual disclosure | Annual Disclosure – within 45 days from the end of financial year | 15-May-20 | 30-Jun-20 | 60 days | |||
| 15 | 52 (1) & (2)
– |
Financial results
Submission of financial results in case of listed commercial papers. |
Half yearly – 45 days from the end of half year | 15-May-20 | 30-Jun-20 | 45 days | |
| Annual – 60 days from the end of financial year for annual financial statements | 30-May-20 | 30-Jun-20 | 30 days | ||||
| Relaxation from compliance with certain provisions of SEBI (LODR) Regulations, 2015 | |||||||
| 16 | 7(3) | Compliance certificate on share transfer facility | Half yearly (one month of end of each half of the financial year) | 30-Apr-20 | 31-May-20 | 1 month | |
| 17 | 13(3) | Statement of investor complaints | Quarterly (21 days from the end of each quarter) | 21-Apr-20 | 15-May-20 | 3 weeks (approx) | |
| 18 | 24A read with circular dated February 8, 2019 | Annual Secretarial Compliance Report | Yearly (60 days from the end of financial year) | 30-May-20 | 30-Jun-20 | 1 month | |
| 19 | 27(2) | Corporate Governance Report | Quarterly (15 days from the end of the quarter) | 15-Apr-20 | 15-May-20 | 1 month | |
| 20 | 31 | Shareholding pattern | Quarterly (21 days from the end of the quarter) | 21-Apr-20 | 15-May-20 | 3 weeks (approx) | |
| 21 | 33 | Financial results | 45 days from the end of the quarter for quarterly results | 15-May-20 | 30-Jun-20 | 45 days | |
| 60 days from the end of Financial Year for Annual Financial Results | 30-May-20 | 30-Jun-20 | 1 month | ||||
| 22 | 17(2) & 18(2)(a) | Meeting of Board of Directors and Audit Committee | Board of Directors and Audit Committee shall meet at least 4 times in a year and not more than 120 days shall elapse between two meetings. | The board of directors and Audit Committee of the listed entity are exempted from observing the maximum stipulated time gap between two meetings for the meetings held or proposed to be held between the period December 1, 2019 and June 30, 2020 | |||
II. SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011[2]
| Sr. No. | Regulation | Particulars | Requirement/Frequency of filing | Original Due Date | Extended Date | Relaxation period |
| Relaxation from compliance with certain provisions of SEBI (SAST) Regulations, 2011 vide circular dated March 27, 2020 | ||||||
| 1 | 30(1) & 30(2) | Continual Disclosures | Every person, who together with persons acting in concert with him, holds shares /voting rights entitling him to exercise 25% or more of the voting rights in a target company, shall disclose their aggregate shareholding and voting rights as of the 31st March, in such target company in such form as may be specified. | Within 7 working days from the end of the financial year March 31, 2020. | 1-Jun-20 | 3 months (approx) |
| 2 | 31(4) | Disclosure of encumbered shares | Promoter of every target company shall together with persons acting in concert with him, disclose their aggregate shareholding and voting rights as of the 31st March, in such target company in such form as may be specified | |||
III. SEBI (Depository and Participants) Regulations, 2018[3]
| Sr.
No. |
Regulation | Particulars | Requirement/Frequency of filing | Original Due Date | Extended Date | Relaxation period |
| Relaxation in time period for certain activities carried out by depository participants, RTAs / issuers, KRAs, stock brokers vide circular dated April 16, 2020 | ||||||
| 1 | 74(5) of SEBI (Depositories and Participants) Regulation, 2018 | Processing of the demat request form by Issuer/ RTA | Submission of certificate with Depository and stock exchange where securities are listed for following:
a. Confirming that the certificate of security received from the DP in the course of processing a dematerialization request of a beneficial owner have been listed on the stock exchange where the earlier issued securities are listed; and b. To the effect that the Company has, after due verification immediately mutilated and canceled the certificate of security and substituted in its record the name of the Depository as the registered owner. |
Within 15 days of receipt of information from participant | Period beginning from March 23, 2020 till May 17, 2020 shall be excluded for computing the existing timelines
Further, 15 day time period after May 17, 2020 is allowed to the SEBI registered intermediary, to clear the back log. |
|
| 2 | 74(5) of SEBI (Depositories and Participants) Regulation, 2018 | Processing of the demat request form by the Participants. | The participant shall furnish to the issuer details specified in sub-regulation (2) of Regulation 74 along with the certificate of security | Within 7 days of the receipt of certificate of security | ||
| 3 | SEBI circular no. MIRSD/Cir-26/2011 dated December 23, 2011 | Uploading KYC application form and supporting documents on KRA system | KYC application form and supporting documents of the clients to be uploaded on system of KRA within 10 working days | Within 10 working days | ||
| Relaxation in adherence to prescribed timelines relating to SEBI (Depositories and Participants) Regulation, 2018 vide circular dated April 13, 2020 | ||||||
| 4 | 74(5) of SEBI (Depositories and Participants) Regulation, 2018 | Submission of certificate with Depository and stock exchange | Submission of certificate with Depository and stock exchange where securities are listed for following:
a. Confirming that the certificate of security received from the DP in the course of processing a dematerialization request of a beneficial owner have been listed on the stock exchange where the earlier issued securities are listed; and b. To the effect that the Company has, after due verification immediately mutilated and canceled the certificate of security and substituted in its record the name of the Depository as the registered owner. |
Within 15 days of receipt of information from participant | Within 15+21+19 days of receipt of information from participant i.e. within 55 days | 40 days |
| 5 | 76(1) of SEBI (Depositories and Participants) Regulation, 2018 | Submission of audit report to stock exchange | Submission of audit report to stock exchange for the purpose of reconciliation of total issued capital, listed capital and capital held by depositories in demat form within 30 days of the end of each quarter | 30-Apr-20 | 10-Jun-20 | 40 days (21+19 days) |
| 6 | 76(3) of SEBI (Depositories and Participants) Regulation, 2018 | Intimation of any difference observed in its issued, listed, and the capital held in demat | The company to bring to the notice of the Depositories and the Stock Exchanges, any difference observed in its issued, listed, and the capital held by the depositories in dematerialised form. | Immediately | within 21 + 19 days i.e. within 40 days | 40 days |
| BSE circular dated April 14, 2020 for extension of Submission Date of Share Capital Audit Report for the quarter ended March 31, 2020 | ||||||
| 7 | 76(1) of SEBI (Depositories and Participants) Regulation, 2018 | Submission of audit report to stock exchange | Submission of audit report to stock exchange for the purpose of reconciliation of total issued capital, listed capital and capital held by depositories in demat form within 30 days of the end of each quarter | 30-Apr-20 | 31-May-20 | 31 days |
IV. SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009[4]
| Sr. No. | ICDR Regulation | Particulars | Requirement/Frequency of filing | Relaxation granted | Relaxation period | |
| One-time relaxation with respect to validity of SEBI observations vide circular dated April 21, 2020 | ||||||
| 1 | 44(1) | Opening of issue in case of IPO | Within 12 months from the date of issuance of the observations by the Board
|
Where the SEBI observations have expired/will expire between March 1, 2020 and September 30, 2020, its validty is extended by 6 months, from the date of expiry of such observation, subject to an undertaking from lead manager of the issue confirming compliance with Schedule XVI of the ICDR Regulations | 6 months | |
| 2 | 85 | Opening of issue in case of Right Issue | Within 12 months from the date of issuance of the observations
In case of a fast track issue, within 12 months from the record date. |
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| 3 | 140 | Opening of issue in case of FPO | Within 12 months from the date of issuance of the observations by the Board
In case of a fast track issue, within the period stipulated under the Companies Act, 2013. In case of shelf prospectus, within 3 months of issuance of observations |
|||
| 4 | Schedule XVI | Filing fresh offer document for increase/decrease in fresh issue size | In case of fresh issue any increase/decrease in estimated issue size by more than 20% of the estimated issue size requires fresh filing of offer document | For IPO/ Rights Issues/ FPO opening before 31.12.2020, issuer shall be permitted to increase/decrease the fresh issue size up to 50% of the estimated issue size without requiring to file fresh draft offer document subject to following conditions:
· there has been no change in the objects of the issue · the lead manager undertakes that the draft offer document is in compliance with provisions of Reg 7(1)(e) · the lead manager shall ensure that all appropriate changes are made to the relevant section of DRHP and an addendum, in this regard, shall be made public. |
||
| Relaxation from certain provisions of ICDR in respect of right issue vide circular dated April 21, 2020 | ||||||
| Applicable for Right Issues open on or before 31.03.2021 (not applicable for issuance of warrants) | ||||||
| 5 | 99(1)(a) | Eligibility conditions related to Fast Track Rights Issue | Equity shares of the issuer have been listed on any stock exchange for a period of at least 3 years immediately preceding the reference date | Period relaxed from ‘3 years’ to ‘18 months’ | ||
| 6 | 99(1)(c) | Average market capitalisation of public shareholding of the issuer is at least Rs. 250 crores | Limit reduced from ‘Rs. 250 crores’ to ‘Rs. 100 crores’ | |||
| 7 | 99(1)(f) | Issuer has been in compliance with the equity listing agreement or LODR Regulations for a period of at least 3 years immediately preceding the reference date
|
Period relaxed from ‘3 years’ to ‘18 months’ | |||
| 8 | 99(1)(h) | No show-cause notices issued or prosecution proceedings initiated and pending against the issuer/ its promoters/ whole-time directors as on the reference date | Issuer is eligible even if any adjudication proceedings initiated/pending against the issuer/ its promoters/ whole-time directors. However, in case a SCN issued or prosecution proceeding initiated against issuer or its promoters/ directors/group companies, necessary disclosures in respect of such action(s) along-with its potential adverse impact on the issuer shall be made in the letter of offer.
|
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| 9 | 99(1)(i) | Issuer or promoter or promoter group or director of the issuer has not settled any alleged violation of securities laws through the consent or settlement mechanism with the Board during 3 years immediately preceding the reference date
|
In case settled any alleged violation of securities laws, issuer is eligible if issuer/promoter/promoter group/ director of the issuer fulfill the settlement terms or adhered to directions of the settlement order(s)
|
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| 10 | 99(1)(j) | Equity shares of the issuer have not been suspended from trading as a disciplinary measure during last 3 years immediately preceding the reference date
|
Period relaxed from ‘3 years’ to ‘18 months’ | |||
| 11 | 99(1)(m) | There are no audit qualifications on the audited accounts of the issuer w.r.t financial years for which such accounts are disclosed in the letter of offer
|
If there are any audit qualifications, issuer is eligible if:
· Issuer provide the restated financial statements adjusting for the impact of the audit qualifications · or the qualifications wherein impact on the financials cannot be ascertained the same shall be disclosed appropriately in the letter of offer
|
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| 12 | 86 | Minimum Subscription for Right Issue | Minimum subscription to be received shall be at least 90% of the offer through the offer document | Minimum subscription percentage reduced from 90% to 75% and if the issue is subscribed between 75% to 90%, issue will be considered successful subject to the condition that out of the funds raised atleast 75% of the issue size shall be utilized for the objects of the issue other than general corporate purpose
|
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| 13 | 3(b), proviso to Reg 3, Reg 60(1) | Minimum threshold required for not filing draft letter of offer with SEBI
|
ICDR Regulations shall apply to right issue by listed issuer where the aggregate value of the issue is Rs. 10 crore or more
|
ICDR Regulations will become applicable where the aggregate value of the issue is Rs. 25 crore or more instead of Rs. 10 crores. | ||
V. SEBI (Buy-back of Securities) Regulations, 2018[5]
| Sr. No. | Regulation | Particulars | Requirement/Frequency of filing | Relaxation granted | Relaxation period |
| Relaxation in the SEBI (Buy-back of Securities) Regulations, 2018 vide circular dated April 23, 2020 | |||||
| 1 | 24(i)(f) | Obligation of the company for buy-back procedure | The company shall not raise further capital for a period of 1 year from the expiry of buyback period, except in discharge of its subsisting obligations
|
Period of restriction relaxed by reducing term of ‘1 year’ to ‘6 months’.
Relaxation applicable till 31.12.2020 |
6 months |
[1] https://www.sebi.gov.in/legal/regulations/jan-2020/securities-and-exchange-board-of-india-listing-obligations-and-disclosure-requirements-regulations-2015-last-amended-on-january-10-2020-_37269.html
[2] https://www.sebi.gov.in/legal/regulations/apr-2019/securities-and-exchange-board-of-india-substantial-acquisition-of-shares-and-takeovers-regulations-2011-last-amended-on-july-29-2019-_40714.html
[3] https://www.sebi.gov.in/legal/regulations/feb-2020/securities-and-exchange-board-of-india-depositories-and-participants-regulations-2018-last-amended-on-february-21-2020-_40622.html
[4] https://www.sebi.gov.in/legal/regulations/jun-2018/securities-and-exchange-board-of-india-issue-of-capital-and-disclosure-requirements-regulations-2009-last-amended-on-february-12-2018-_39242.html
[5] https://www.sebi.gov.in/legal/regulations/jul-2019/securities-and-exchange-board-of-india-buy-back-of-securities-regulations-2018-last-amended-on-july-29-2019-_40327.html
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