Regulation 30: Disclosure of Regulatory and similar Actions

– Palak Jaiswani | corplaw@vinodkothari.com

Apparently with a view to make disclosure more stringent and widen the scope of disclosures, SEBI introduced two new clauses pertaining to regulatory actions, as clause 19 and 20, in Schedule III.A.A, as a part of SEBI (Listing Regulations and Disclosure Requirements) (Second Amendment) Regulations, 2023,  with effect from July 14, 2023.

Newly inserted clauses 19 and 20 in Para A Part A of Schedule III cover the regulatory and similar actions which are required to be disclosed irrespective of the materiality thresholds prescribed.

There is a huge confusion as to what sort of regulatory actions are to be covered in item 19 and 20. Trivial fines and penalties have begun coming up on stock exchange reporting. Hence, it is very important to ascertain the type of regulatory actions that fall within the ambit of either of these two clauses. This article intends to understand the scope and coverage of the aforesaid clauses.

Read more

Online workshop on LODR Reg 30 changes: Clause by clause guide to implementation

On request of several of our participants, we are postponing the workshop to the 28th of July, 2023, Friday, 4pm-7pm.
Register now at : https://forms.gle/emHhuy6rNdhfCtbo7
Loader Loading…
EAD Logo Taking too long?

Reload Reload document
| Open Open in new tab

Download as PDF [135.63 KB]

Silence no more golden: New regulatory regime forces top listed companies to respond to rumours

Vinod Kothari and Nitu Poddar (corplaw@vinodkothari.com)

– Updated February 02, 2024

Come June 1, 2024, top 100 listed companies, and thereafter, effective from December 1, 2024 top 250 listed companies, will have to mandatorily respond to market rumours, and cannot keep a policy of maintaining their own silence. What is the intent and scope of this requirement? Does this requirement expect companies to scan through more than 100000 mainstream media publications, and news channels and innumerable investor influencers, keep searching for the written or spoken word about the company, and then keep responding to all the din about the company? Or, the intent is just to ensure that a false market in the company’s securities is not being created or propped up by the company’s silence? And if the company is to respond to rumours, how and where does it respond?

These are some very pertinent questions bothering the larger of the listed entities. We are trying to address some of these questions below.

Read more

Identifying Senior Managers: Listing rules may force companies to relook at the tag

Identification as a “senior management person” brings information needs as well as obligations 

– Pammy Jaiswal and Mahak Agarwal

Background

The concept of Senior Management ( herein, ‘SM’, and senior management person or personnel as ‘SMP’ or ‘SMPs’) was not there under the regime of the Companies Act, 1956 and was first introduced under Section 178 of the Companies Act, 2013 (Act, 2013). The law requires the Nomination and Remuneration Committee to get into compensation policies of SMPs.  The definition under the Listing Regulations has, over time, been aligned with that under the Act, 2013. These definitions have been around for almost 10 years now, and therefore, largely seem to have settled.

However, the LODR (2nd Amendment) Regulations[1] have introduced several new information requirements and obligations pertaining to SMPs, which has given rise to the need for relooking at the said position from a fresh perspective.

Read more

Mandatory listing for further bond issues

“Listed once, always go for listing” to apply for new bond issues; optional for existing unlisted issuances

Vinita Nair | Vinod Kothari & Company | corplaw@vinodkothari.com

June 29, 2023 (updated on September 21, 2023)

Background

SEBI approved the proposal for mandatory listing of debentures/ NCDs, in its Board meeting held on June 28, 2023, for all listed entities having outstanding listed NCDs as on December 31, 2023. Effective Jan. 1, 2024, such listed entities will have to now mandatorily list each of its subsequent issuance of NCDs on the stock exchanges.

Aimed at better information flow and liquidity considerations, the move is said to be inspired by data analysis carried out by SEBI, as discussed in its Consultation Paper dated February 09, 2023, basis the information obtained from the depositories. Succinctly, the snapshot of unlisted bond issues by listed companies (it seems that the data of unlisted bond issuances by unlisted companies is not available),  as on January 31, 2023, is as follows:

Figure 1: Snapshot of unlisted bonds issuance by listed entities

This would mean roughly 8% of all bond issuances by listed companies are outstanding, excluding bond issues by completely unlisted entities, which may be insignificant for the purpose of analysis.

Read more

Proposals approved in SEBI Board Meeting held on June 28, 2023: Mandatory Listing of NCDs | Revised sponsor holding in REITs/InvITs and more…

Kaushal Shah, Executive | kaushal@vinodkothari.com

Loader Loading…
EAD Logo Taking too long?

Reload Reload document
| Open Open in new tab

Download as PDF [164.05 KB]

Outline for SOP in the context of Regulation 30 of the Listing Regulations

– Team Corplaw | corplaw@vinodkothari.com

Loader Loading…
EAD Logo Taking too long?

Reload Reload document
| Open Open in new tab

Download as PDF [62.19 KB]

FAQs on LODR Second Amendment Regulations, 2023

– Team Corplaw | corplaw@vinodkothari.com

Loader Loading…
EAD Logo Taking too long?

Reload Reload document
| Open Open in new tab

Download as PDF [748.09 KB]

Read our other resources on LODR Second Amendment Regulations, 2023

SEBI prescribes thresholds for determining material events, stringent approval for sale of undertaking and more

– Sharon Pinto and Shreya Salampuria | corplaw@vinodkothari.com

Keeping in view of the significance of the amendments, we are conducting a workshop on the same. Details can be accessed herehttps://vinodkothari.com/2023/06/workshop-on-sebi-lodr-2nd-amendment-regulations-2023/
Loader Loading…
EAD Logo Taking too long?

Reload Reload document
| Open Open in new tab

Download as PDF [314.29 KB]

Also read our detailed article on –

(i) Disclosure of material events under Reg 30

(ii) Insertion of new Reg. 37A

Stricter framework for sale, lease or disposal of undertaking by a listed entity

– Nitu Poddar | corplaw@vinodkothari.com

Reg 37A of Listing Regulations requires additional voting and disclosure requirements

Keeping in view of the significance of the amendments, we are conducting a workshop on the same. Details can be accessed athttps://vinodkothari.com/2023/06/workshop-on-sebi-lodr-2nd-amendment-regulations-2023/
The article was also published by IndiaCorpLaw and can be viewed here

Disposal of an undertaking (whole or substantially the whole) can be done either as part of a scheme of arrangement or otherwise by way of slump sale / business transfer agreement (‘BTA’). Disposal, other than by way of scheme of arrangement, have so far been regulated as per section 180(1)(a) of the Companies Act, 2013 (‘Act’) which requires approval of the shareholders by way of special resolution. SEBI has prescribed approval requirement in this regard by way of introduction of regulation 37A vide SEBI (Listing Obligations and Disclosure Requirements) (Second Amendment) Regulations, 2023 (‘Amendment Regulations’) effective from June 14, 2023 that requires listed entities to follow a stricter regime for disposal of undertaking inter alia mandating approval from majority of the public shareholders who are not interested in the transaction, disclosure of the object, commercial rationale and use of proceeds arising from such transaction. While there is an exemption provided in case of transactions with a wholly owned subsidiary (WOS), the approval regime will apply in case of disposal of undertaking by such WOS or any reduction in shareholding in the WOS subsequent to transfer of the undertaking.

The said amendment is based on the Consultation Paper rolled by SEBI on February 21, 2023. Apart from incorporating the provisions proposed in this regard in the Consultation Paper, the amendment has introduced new provisions as well. Provision with respect to seeking approval from the shareholders of the listed entity in case a WOS is used as a conduit for transfer in undertaking is a new requirement brought in through the amendment.

Read more