prpri Analysis of SEBI Listing Obligations and Disclosure Requirements) (Second Amendment) Regulations, 2021 Analysis of SEBI Listing Obligations and Disclosure Requirements) (Second Amendment) Regulations, 2021

SEBI has amended the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (LODR Regulation) in short. 

SEBI has notified the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Second Amendment) Regulations, 2021 on 5th May 2021.

Though the SEBI has amended many regulations but here I am making chart of some of that changes. The amendments have been made to the following regulations:

Before Amendment After Amendment
Regulation 6 -Compliance Officer and his Obligations In regulation 6, in the heading, the symbol and word “/her” shall be inserted after the word “his”.

Compliance Officer and his/her Obligations

Regulation 7(3)- Share Transfer Agent.

The listed entity shall submit a compliance certificate to the exchange, duly signed by both the compliance officer of the listed entity and the authorised representative of the share transfer agent, wherever applicable, within one month of end of each half of the financial year.

In regulation 7, in sub-regulation (3), the words “one month of” shall be substituted with the words “thirty days from the” and the words “each half of” shall be omitted.

The listed entity shall submit a compliance certificate to the exchange, duly signed by both the compliance officer of the listed entity and the authorised representative of the share transfer agent, wherever applicable, within thirty days from the of end of the financial year.

Regulation 18(1)(d)- Audit Committee

The chairperson of the audit committee shall be an independent director and he shall be present at Annual general meeting to answer shareholder queries

in regulation 18, in sub-regulation (1), in clause (d), the symbol and word “/she” shall be inserted after the word “he”.

The chairperson of the audit committee shall be an independent director and he/she shall be present at Annual general meeting to answer shareholder queries

Regulation 21- Risk Management Committee.

21(2) The majority of members of Risk Management Committee shall consist of members of the board of directors [and in case of a listed entity having outstanding SR equity shares, at least two thirds of the Risk Management Committee shall comprise of independent directors].

(3A) The risk management committee shall meet at least once in a year.

(5) The provisions of this regulation shall be applicable to top 500 listed entities, determined on the basis of market capitalisation, as at the end of the immediate previous financial year

In regulation 21,

i. the existing sub-regulation (2) shall be substituted with the following, namely, –

“The Risk Management Committee shall have minimum three members with majority of them being members of the board of directors, including at least one independent director and in case of a listed entity having outstanding SR equity shares, at least two thirds of the Risk Management Committee shall comprise independent directors.”

ii. in sub-regulation (3A), the word “once” shall be substituted with the word “twice”.

The risk management committee shall meet at least twice in a year.

iii. after sub-regulation (3A) and before sub-regulation (4), the following new sub-regulations (3B) and (3C) shall be inserted, namely, –

“(3B) The quorum for a meeting of the Risk Management Committee shall be either two members or one third of the members of the committee, whichever is higher, including at least one member of the board of directors in attendance.

(3C) The meetings of the risk management committee shall be conducted in such a manner that on a continuous basis not more than one hundred and eighty days shall elapse between any two consecutive meetings.”

iv. after sub-regulation (4), the following new proviso shall be inserted, namely, –

“Provided that the role and responsibilities of the Risk Management Committee shall mandatorily include the performance of functions specified in Part D of Schedule II.”

v. in sub-regulation (5), the number “500” shall be substituted with the number “1000”.

The provisions of this regulation shall be applicable to top 1000 listed entities, determined on the basis of market capitalisation, as at the end of the immediate previous financial year

vi. after sub-regulation (5), the following new sub-regulation shall be inserted, namely, –

“(6) The Risk Management Committee shall have powers to seek information from any employee, obtain outside legal or other professional advice and secure attendance of outsiders with relevant expertise, if it considers necessary.”

Regulation 22(1)- Audit Committee

The listed entity shall formulate a vigil mechanism for directors and employees to report genuine concerns

In regulation 22, in sub-regulation (1), the symbol and words “/whistle blower policy” shall be inserted after the word “mechanism”.

The listed entity shall formulate a vigil mechanism/whistle blower policy for directors and employees to report genuine concerns

Regulation 24(5) – Corporate governance requirements with respect to subsidiary of listed entity

A listed entity shall not dispose of shares in its material subsidiary resulting in reduction of its shareholding (either on its own or together with other subsidiaries) to less than fifty percent or cease the exercise of control over the subsidiary without passing a special resolution in its General Meeting except in cases where such divestment is made under a scheme of arrangement duly approved by a Court/Tribunal.

in regulation 24, in sub-regulation (5), the words “or equal to” shall be inserted after the words “less than” and before the words “fifty percent

A listed entity shall not dispose of shares in its material subsidiary resulting in reduction of its shareholding (either on its own or together with other subsidiaries) to less than or equal to fifty percent or cease the exercise of control over the subsidiary without passing a special resolution in its General Meeting except in cases where such divestment is made under a scheme of arrangement duly approved by a Court/Tribunal.

Regulation 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 24A,

i. in the heading, the words “and Secretarial Compliance Report” shall be inserted after the words “Secretarial Audit”.

Secretarial Audit and Secretarial Compliance Report

ii. the existing provision at regulation 24A shall be numbered as sub-regulation (1) and substituted with the following, namely, –

“(1) Every listed entity and its material unlisted subsidiaries incorporated in India shall undertake secretarial audit and shall annex a secretarial audit report given by a company secretary in practice, in such form as specified, with the annual report of the listed entity.”

iii. after the newly numbered sub-regulation (1), a new sub-regulation shall be inserted, namely,

“(2) Every listed entity shall submit a secretarial compliance report in such form as specified, to stock exchanges, within sixty days from end of each financial year.”

Regulation 25- Obligations with respect to independent directors

25(3) The independent directors of the listed entity shall hold at least one meeting in a year, without the presence of non-independent directors and members of the management and all the independent directors shall strive to be present at such meeting.

in regulation 25,

i. in sub-regulation (3), the word “financial” shall be inserted after the words “meeting in a” and before the word “year”.

The independent directors of the listed entity shall hold at least one meeting in a financial year, without the presence of non-independent directors and members of the management and all the independent directors shall strive to be present at such meeting.

Regulation 27- Other corporate governance requirements.

27(2) (a) The listed entity shall submit a quarterly compliance report on corporate governance in the format as specified by the Board from time to time to the recognised stock exchange(s) within fifteen days from close of the quarter.

Regulation 30 Disclosure of events or information.

Provided further that disclosure with respect to events specified in sub-para 4 of Para A of Part A of Schedule III shall be made within thirty minutes of the conclusion of the board meeting.

in regulation 27, in sub-regulation (2), in clause (a), the word “fifteen” shall be substituted with the words “twenty one” and the words “close of the” shall be substituted with the words “the end of each”.

27(2) (a) The listed entity shall submit a quarterly compliance report on corporate governance in the format as specified by the Board from time to time to the recognised stock exchange(s) within twenty one days from the end of each the quarter.

in regulation 30, in sub-regulation (6), in the second proviso, the words “thirty minutes of the conclusion of the board meeting.” shall be substituted with the words “the timelines specified therein”.

Provided further that disclosure with respect to events specified in sub-para 4 of Para A of Part A of Schedule III shall be made within the timelines specified therein of the conclusion of the board meeting.

Regulation 32- Statement of deviation(s) or variation(s).

Where the listed entity has appointed a monitoring agency to monitor utilisation of proceeds of a public or rights issue, the listed entity shall submit to the stock exchange(s) any comments or report received from the monitoring agency.

in sub-regulation (6), the words “within forty-five days from the end of each quarter.” shall be inserted after the words “from the monitoring agency.

Where the listed entity has appointed a monitoring agency to monitor utilisation of proceeds of a public or rights issue, the listed entity shall submit to the stock exchange(s) any comments or report received from the monitoring agency within forty-five days from the end of each quarter.

Regulation 33- Financial results.

The [Statement on Impact of Audit Qualifications (for audit report with modified opinion)] sand the accompanying annual audit report submitted in terms of clause (d) of sub-regulation (3) shall be reviewed by the stock exchange(s)

sub-regulation (6) shall be omitted.

The [Statement on Impact of Audit Qualifications (for audit report with modified opinion)] sand the accompanying annual audit report submitted in terms of clause (d) of sub-regulation (3) shall be reviewed by the stock exchange(s)

Regulation 38- Minimum Public Shareholding

The listed entity shall comply with the minimum public shareholding requirements specified in Rule 19(2) and Rule 19A of the Securities Contracts (Regulation) Rules, 1957 in the manner as specified by the Board from time to time:

Provided that provisions of this regulation shall not apply to entities listed on institutional trading platform without making a public issue.

in regulation 38, the words “Institutional Trading Platform” shall be substituted with the words “Innovators Growth Platform”.

The listed entity shall comply with the minimum public shareholding requirements specified in Rule 19(2) and Rule 19A of the Securities Contracts (Regulation) Rules, 1957 in the manner as specified by the Board from time to time:

Provided that provisions of this regulation shall not apply to entities listed on Innovators Growth Platform without making a public issue.

Regulation 40- Transfer or transmission or transposition of securities

40(9) The listed entity shall ensure that the share transfer agent and/or the in-house share transfer facility, as the case may be, produces a certificate from a practicing company secretary within one month of the end of each half of the financial year, certifying that all certificates have been issued within thirty days of the date of lodgement for transfer, sub-division, consolidation, renewal, exchange or endorsement of calls/allotment monies

in regulation 40, in sub-regulation (9), the words “one month of” shall be substituted with the words “thirty days from” and the words “each half of” shall be omitted.

The listed entity shall ensure that the share transfer agent and/or the in-house share transfer facility, as the case may be, produces a certificate from a practicing company secretary within thirty days from of the end of the financial year, certifying that all certificates have been issued within thirty days of the date of lodgement for transfer, sub-division, consolidation, renewal, exchange or endorsement of calls/allotment monies.

Regulation-43A- Dividend Distribution Policy.

43A(1) The top five hundred listed entities based on market capitalization (calculated as on March 31 of every financial year) shall formulate a dividend distribution policy which shall be disclosed in their annual reports and on their websites.

43A(3) The listed entities other than top five hundred listed entities based on market capitalization may disclose their dividend distribution policies on a voluntary basis in their annual reports and on their websites.

in regulation 43A,

in sub-regulation (1), the words “five hundred” shall be substituted with the figures “1000” and the words “in their annual reports and on their websites” shall be substituted with the words “on the website of the listed entity and a web-link shall also be provided in their annual reports”.

(1) The top 1000 listed entities based on market capitalization (calculated as on March 31 of every financial year) shall formulate a dividend distribution policy which shall be disclosed in their on the website of the listed entity and a web-link shall also be provided in their annual reports.

ii. sub-regulation (3) shall be substituted with the following, namely, –

“(3) The listed entities other than those specified at sub-regulation (1) of this regulation may disclose their dividend distribution policies on a voluntary basis on their websites and provide a web-link in their annual reports.”

Regulation-44- Voting Result

44(3) The listed entity shall submit to the stock exchange, within forty eight hours of conclusion of its General Meeting, details regarding the voting results in the format specified by the Board.

in regulation 44, in sub-regulation (3), the words “forty eight hours” shall be substituted with the words “two working days

The listed entity shall submit to the stock exchange, within two working days of conclusion of its General Meeting, details regarding the voting results in the format specified by the Board.

Regulation-47-Advertisements in Newspapers

The listed entity shall publish the following information in the newspaper:

(a) notice of meeting of the board of directors where financial results shall be discussed.

(c) statements of deviation(s) or variation(s) as specified in sub-regulation (1) of regulation 32 on quarterly basis, after review by audit committee and its explanation in directors report in annual report; 

in regulation 47, in sub-regulation (1), clauses (a) and (c) shall be omitted

(a) notice of meeting of the board of directors where financial results shall be discussed.

(c) statements of deviation(s) or variation(s) as specified in sub-regulation (1) of regulation 32 on quarterly basis, after review by audit committee and its explanation in directors report in annual report;

 Hope all this information will help you. If you still have any doubt or need further detail then you can contact me at Email csambikasharma@gmail.com

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My self Ambika Sharma a practicing company secretary, having 7 years of working experience in the field of Company Law, Stock exchange compliance, Revocation from stock exchanges, Income tax return, GST registration etc View Full Profile

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