SEBI approves uniform approach for market rumour verification, eases on-going compliance requirement for listed companies, eases norms for IPO/ fund raising, AIFs, relaxes requirement for FPI & extends timeline for HVDLE on March 15, 2024

-Avinash Shetty and Manisha Ghosh | corplaw@vinodkothari.com

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Directors’ Responsibility towards Climate Change: Lessons from Recent Litigation

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Recent regulatory developments for listed entities – critical changes under LODR and PIT Regulations

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Cyber security incidents to be reported quarterly to stock exchanges

Circular differs from the discussion in SEBI Board meeting

– Aisha Begum Ansari | corplaw@vinodkothari.com

Brief background

With business operations going digital, the threat of cyber attacks have increased considerably. Effective from April 2019, the Risk Management Committee of a listed entity was mandated by SEBI to discharge the function for laying down a framework for identifying the cyber security risks. In case of financial sector entities, the requirements laid down by the sectoral regulators are stricter and elaborate[1].

Additionally, the companies are required to report the cyber security incidents to an agency called Indian Computer Emergency Response Team (‘CERT-In’) which is established in terms of section 70B of the Information Technology Act, 2000 and comes under the Ministry of Electronics and Information Technology (‘MEITY’).

Present Circular

Since, the cyber security incidents are material in nature and may be relevant for the investors, SEBI vide its notification dated June 14, 2023 inserted reg. 27(2)(ba) in the Listing Regulations mandating the listed entities to disclose the details of cyber security incidents or breaches or loss of data or documents in its quarterly Corporate Governance (CG) report filed in terms of Reg. 27 (2) effective from July 13, 2023. Pursuant to the same, the stock exchanges, on September 29, 2023, released a format for disclosure of cyber security incidents in the quarterly CG report commencing from quarter ended September 30, 2023 , which covers the following:

  • Confirmation on any instance of cyber security incident or breach or loss of data or documents during the quarter;
  • Date of the event;
  • Brief details of the event.

This article analyzes the above requirement in light of the proposal made in the consultation paper, discussion in SEBI Board meeting agenda and the gaps arising therefrom .

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Stock options entail multi-stage disclosure to stock exchanges

Requirement under SEBI Listing Regulations and SBEB Regulations

– Aisha Begum Ansari | corplaw@vinodkothari.com

Employee share benefit schemes in the form of ESOP, ESPS, etc. (‘stock options’) facilitate the employees to participate in the growth of the companies. Since, the issue of shares pursuant to exercise of stock options leads to dilution of the share capital of the company, the same may be relevant or material event or information for the investors. Therefore, right from the board meeting in which the decision relating to ESOP scheme is undertaken till the time of allotment of shares, disclosure is required to be made at different stages either in terms of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘Listing Regulations’) or SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (‘SBEB Regulations’). This article deals with the requirements and the stages when the disclosure is required to be made by a company.

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Workshop on Recent regulatory developments for listed entities: critical changes under LODR and PIT Regulations

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SEBI approves changes in SSE framework – Eases registration & listing of NPOs

– Payal Agarwal, Senior Manager | corplaw@vinodkothari.com

(Updated as on November 28, 2023)

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Framework for voluntary delisting of debt securities notified

– Sharon Pinto, Senior Manager & Palak Jaiswani, Asst. Manager | corplaw@vinodkothari.com

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Our resources related to the topic:-

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Our YouTube Videos on the related topics:

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Disclosure of shareholders’ pacts: Jo wada kiya wo bataana padega

Scope of Clause 5A of Schedule III.A.A, r/w Reg 30A

Vinod Kothari, Managing Partner | corplaw@vinodkothari.com

The spate of new disclosure requirements introduced by Reg 30 of the Listing Regulations includes one of the most controversial pieces – disclosure of shareholders’ agreements which may impact or are designed to impact the management or control of a listed entity. This requirement is applicable not only to the pacts entered into after the effective date of the amendment, but also to existing agreements, which, by reg. 30A, need to be bared by the contracting parties to the company, and the company in turn, will need to upload this information to the public. There are views circula that the entire body of such agreement has to be made public.

We cannot miss the fact that a sizeable portion of the capital of listed companies in India is held by families. An OECD document says nearly half of the listed companies’ capital in India is held by promoter families.

Naturally, anything that pierces, peeps in or lifts the veil of family arrangements is as challenging as any attempt to get into anyone’s privacy. Note that privacy concerns are not in any way less important for promoter families, than for yours or mine.

Therefore, evidently, this issue has raked up a lot of controversy. Compliance Officers are even facing the query as to whether a will is also required to be disclosed.    

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LODR Reg 30 changes: Clause-by-clause guide to implementation

Team Corplaw | corplaw@vinodkothari.com

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