Posts

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

Workshop on SEBI LODR 2nd Amendment Regulations, 2023

In view of the overwhelming response received for our workshop held yesterday, we are announcing a repeat workshop on 30th June, 2023. You may register your interest here – https://docs.google.com/forms/d/e/1FAIpQLSff223EAvPfU3roZogwubvO0cQ1S1Dx8R9Kopv8XH-ff0nX_g/viewform
Loader Loading…
EAD Logo Taking too long?

Reload Reload document
| Open Open in new tab

Download as PDF [128.80 KB]

Getting material on “material” events and information:

SEBI notifies amendments to Listing Regulations

-Payal Agarwal, Manager  (payal@vinodkothari.com

Keeping in view of the significance of the amendments, we are conducting a workshop on the same. Details can be accessed here – https://vinodkothari.com/2023/06/workshop-on-sebi-lodr-2nd-amendment-regulations-2023/

The importance of transparency and timely dissemination of material information for a listed entity needs no emphasis, since most of these events and information may have a direct bearing on the price discovery of the securities of the listed entities and the investors’ decisions. The intent of Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”) is to ensure a seamless flow of information; the Regulation is complemented by Schedule III thereto, which provides an indicative list of the events or information in a listed entity that may be considered “material” and thereby, requires prompt disclosure by way of intimations to the stock exchange(s) in which the entity is listed.

While Para A of Part A of Schedule III specifies the list of information/ events which are “deemed” material, Para B specifies a list of information/ events which are to be tested based on the application of guidelines of materiality. Further, Para C requires intimation of any major development that is likely to affect the business and Regulation 30 also provides a residuary provision of intimation of any other information or event that does not fall either under Para A or Part B of Part A of the Listing Regulations, however, is material.  The guidelines of materiality for the purpose of testing the events/ information under Para B of Part A of Schedule III are provided in sub-regulation (4) of Reg 30 and are supposed to be documented in the policy for determination of materiality (“Materiality Policy”) of the listed entity. The Materiality Policy of a listed entity plays a prominent role in determining the disclosure practices of a listed entity.

SEBI vide an amendment notification dated 14th June 2023 has notified (“Amendment Regulations”) several changes to the Listing Regulations which were earlier proposed in a Consultation Paper with respect to the disclosure of material events. The same has now been incorporated under the Listing Regulations itself. A few of these include :

  1. Quantifying the meaning of “material”, thereby limiting discretion with the listed entities,
  2. Requiring amendments in Materiality Policy;
  3. Reducing timelines for disclosures;  
  4. Mandatory verification of market rumours by top 100 (250 from FY 24-25) listed entities;
  5. Broadening and shuffling of the events/ information listed under Schedule III etc.

The Amendment Regulations are applicable from the 30th day of the  publication of the notification, i.e., on and from 14th July, 2023. Further, the amendments are applicable only to the equity-listed entities, since debt-listed entities including High-value Debt Listed Entities are outside the scope of Regulation 30. We have listed some of the major amendments in this write-up.

Read more

Legal Entity Identifier Code now mandatory for bond issuers

Ajay Ramanathan, Executive | ajay@vinodkothari.com

Background

Legal Entity Identifier (LEI) Code is a unique 20-digit code used to identify legal entities that engage in financial transactions worldwide in order to improve the quality and accuracy of financial data systems for better risk management post the global financial crisis by establishing a global reference system.

Prior to the present SEBI Circular, all non-individual borrowers availing an aggregate exposure[1] of Rs. 5 crore and above from banks and financial institutions were mandated to obtain LEI Code over the prescribed timeline.

Read more

Continuing Disclosures by listed entities: Regulation 30 of SEBI LODR

– Vinod Kothari | corplaw@vinodkothari.com

Loader Loading…
EAD Logo Taking too long?

Reload Reload document
| Open Open in new tab

Download as PDF [911.96 KB]

Our article on Reg 30 of LODR Regulations can be viewed here

Presentation on Annual Secretarial Compliance report

– Vinita Nair, Senior Partner | corplaw@vinodkothari.com

Loader Loading…
EAD Logo Taking too long?

Reload Reload document
| Open Open in new tab

Download as PDF [602.72 KB]

Regulating ESG Rating Providers in India

– SEBI approves regulations for ERPs through amendments to CRA Regulations

– Payal Agarwal, Deputy Manager (payal@vinodkothari.com)

As ESG and climate change concerns assume global priority, there is a growing interest among businesses to claim their offerings, products or structures to be green.  This  growing interest of a variety of stakeholders has led to the emergence of ESG Rating Providers (“ERPs”) for ranking an entity’s ESG profile, providing “green” or other coloured labels, or giving other affirmations as sustainability or sustainable-linkage. Unlike credit ratings, ESG ratings are currently not within the direct domain of securities regulators; however, to the extent ESG ratings relate to securities offerings or financial products, the securities regulators claim to have jurisdiction., he International Organization of Securities Commissions (“IOSCO”) has been working towards evolving recommendatory standards. IOSCO published its final report on Environmental, Social and Governance (ESG) Ratings and Data Products Providers (“IOSCO Consultation Report”) in November, 2021.

Following the same, SEBI released a consultation paper on Environmental, Social and Governance (ESG) Rating Providers for Securities Markets (“ERPs Consultation Paper”) on 24th January, 2022, and on the basis of the public consultation as well as global regulatory developments, had proposed a draft regulatory framework for ERPs (“Draft ERP Framework”) on 22nd February, 2023. Recently, on 29th March, 2023, SEBI has approved to bring a regulatory framework for ERPs in India, by inserting a new chapter to the existing SEBI (Credit Rating Agencies) Regulations, 1999 (“CRA Regulations”).

Read more

SEBI amends its comprehensive PIT FAQs: Explains contra trade restrictions

Aisha Begum Ansari & Sanya Agarwal | corplaw@vinodkothari.com

Loader Loading…
EAD Logo Taking too long?

Reload Reload document
| Open Open in new tab

Download as PDF [204.67 KB]

SEBI approves a basket of amendments – BM dated 29th March, 2023

ESG BRSR core, Quantitative thresholds for material events, Dematerialisation of Bonus shares, Backstop fund for mutual funds, Valuation rules for AIFs

– Mahak Agarwal, Sanya Agrawal & Vanshika Khandelwal | corplaw@vinodkotahri.com

Loader Loading…
EAD Logo Taking too long?

Reload Reload document
| Open Open in new tab

Download as PDF [179.71 KB]