Major amendments in SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015:
The Securities and Exchange Board of India (“SEBI”) has continuously endeavoured to streamline the provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”) to facilitate ease of compliance for listed entities.
On June 14, 2023, SEBI introduced new provisions concerning the verification of market rumours, applicable to the top 100 and top 250 listed entities. To simplify the implementation of these compliance requirements, SEBI established an Industry Standard Forum (ISF) comprising three industry associations: ASSOCHAM, CII, and FICCI. Based on ISF’s recommendations regarding the determination of materiality in terms of “price movement,” SEBI issued a consultation paper to solicit public comments on using material price movement as the criterion for verifying market rumours, instead of a material event under Regulation 30 of the Listing Regulations.
Following ISF’s recommendations and stakeholder consultations, SEBI, in its meeting on March 15, 2024, approved the verification of rumours based on the material price movement of the equity shares of listed entities.
Additionally, to enhance the ease of doing business for listed entities, SEBI amended certain provisions of the Listing Regulations through its notification titled the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2024, dated May 17, 2024 which shall come into force from the date their publication in the Official Gazette.
However, amendments to Regulations 3, 17, 21(5), 25, 30 (omission of the Explanation under sub-regulation (11)), 34, 43A, and 44 will come into force on December 31, 2024.
SEBI has also amended the Market Capitalisation compliance requirement of the listed entities. As per the amendment, the market capitalisation shall be determined on the basis of average market capitalization of six months ending December 31, instead of single day’s (March 31) market capitalization and substituted sub regulation (2) of Regulation 3 of Listing Regulation.
The sub clause (a) of sub regulation (2) of Regulation 3 of Listing Regulation states that Every recognized stock exchange shall, at the end of the calendar year i.e., 31st December, prepare a list of entities that have listed their specified securities ranking such entities on the basis of their average market capitalisation from 1st July to 31st December of that calendar year.
The major amendments in the Listing Regulations are as follows:
| Sl. No. | Regulation | Particulars | Old Provisions | New/ Amended provisions | Applica-bility |
| 1 | 21 (3C) |
Time gap for conduction the meeting of Risk Management Committee | 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. |
The meetings of the risk management committee shall be conducted in such a manner that on a continuous basis not more than two hundred and ten days shall elapse between any two consecutive meetings. |
17-05-2024 |
| 2 | 26A | Extended timeline for filling up vacancies of certain KMP which requires statutory approval | Vacancy in the Office of CEO, CFO, MD, WTD or Manager shall be filled by listed entity at the earliest but not later than 3 months. | Insertion of new provisions:
Where the listed entity is required to obtain approval of regulatory, government or statutory authorities to fulfil the vacancy, then the vacancy in the Office of CEO, CFO, MD, WTD or Manager shall be filled by listed entity at the earliest but not later than 6 months. |
17-05-2024 |
| 3 | 29 | Harmonization and reduction of timeline of prior intimation | Time line for Prior intimation:
Atleast 2 working days in advance excluding the date of the intimation and date of meeting: 1) For declaration/ recommendation of dividend/ declaration for Bonus Issue/ Buy Back/ Voluntarily Delisting/ Raising of fund by way of Public Issue/ Right Issue/ ADR/GDR etc; Atleast 5 days in advance excluding the date of the intimation and date of meeting: 2) Financial Results; Atleast 11 working days in advances: 3) Alteration in the form or nature of listed securities/ rights or privileges of holders/ alteration in the |
Time line for prior Intimation:
Atleast 2 working days in advance excluding the date 1) For declaration/ recommen-dation of dividend/ declaration for Bonus Issue/ Buy Back/ Voluntarily Delisting/ Raising of fund by way of Public Issue/ Right Issue/ ADR/GDR etc; 2) Financial Results; 3) Alteration in the form or nature of listed securities/ rights or privileges of holders/ alteration in the date of payment of interest on |
17-05-2024 |
| 4 | 29 (1)(d) | Exclusion of certain debt securities | Fund raising by way of deb issue. | Fund raising by way of issuance of securities excluding securities receipt, securitized debt instrument or money market instrument by the Reserve Bank. | 17-05-2024 |
| 5 | 29 (1)(d) | Determination of issue price | Prior intimation is to be given for raising of funds by way of issuance of securities and for determination of issue price. | Insertion of proviso to Reg 29(1) which says:
Intimation for determination of issue price in a qualified institutional placement in not required if such placement is done in accordance with the provisions of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 |
17-05-2024 |
| 6 | 30(11) proviso | Verification of Market rumour | Top 100 listed entities and top 250 listed entities shall confirm, deny or clarify:
1) Any reported event or information in the mainstream media 2) Which is not general in nature and 3) Which indicates that rumours of an impending specific material event or information |
Top 100 listed entities and top 250 listed entities shall confirm, deny or clarify:
1) Material Price movement 2) Any reported event or information in the mainstream media 3) Which is not general in nature and 3) Which indicates that rumours of an impending specific event or information |
For top 100 listed entities- w.e.f 01/06/20 24;for next 150 Listed entities- w.e.f 01/12/20 24 |
| 7 | 30
(11) proviso |
Consideration of unaffected price for transaction where pricing norms have been prescribed by SEBI provided the rumour pertaining to such transaction has been confirmed within 24 hours from the trigger of material price movement. |
Insertion of new proviso:
When the listed entity confirms within 24 hours from the triggering of material price movement, any reported event or information on which pricing norms provided under Chapter V or Chapter VI of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 or pricing norms provided under Regulation 8 or Regulation 9 of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 or pricing norms provided under Regulation 19 or Regulation 22B of the Securities and Exchange Board of India (Buy-back of Securities) Regulations, 2018 or any |
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| 8 | 30 (11A) | Obligation is on the promoter, Director, Key Management Personnel or Senior Management for providing response to listed entities for verification of Market Rumours. This may lead to amendment in the policy for determination of materiality of the Company. |
Insertion of new proviso:
The Promoter, Director, Key Management Personnel or Senior Management of the listed entities shall provide adequate, accurate and timely response to queries raised or explanation sought by the listed entity in order to ensure compliance with the requirements under sub-regulation 11 of Listing Regulation and the listed entity shall disseminate the response received from such individual(s) promptly to stock exchanges. |
Conclusion: SEBI’s amendments to the Listing Regulations represent a pivotal step towards enhancing compliance and operational efficiency for listed entities. By introducing measures to verify market rumours based on material price movements, extending timelines for KMP vacancies, and harmonizing notification requirements, SEBI ensures that the regulatory framework remains robust yet adaptable. These changes are expected to facilitate a more transparent and streamlined operational environment for India’s top listed companies, ultimately benefiting the broader market and investors.
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Prepared by: CS Gagan Gupta | Assistant Manager | Transaction Square LLP
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Disclaimer: The entire contents of this document have been prepared based on relevant provisions and as per the information existing at the time of the preparation. Although care has been taken to ensure the accuracy, completeness, and reliability of the information provided, I assume no responsibility, therefore. Users of this information are expected to refer to the relevant existing provisions of applicable Laws. The user of the information agrees that the information is not professional advice and is subject to change without notice. I assume no responsibility for the consequences of the use of such information.
Author Bio
I appreciate your reply, Sagar. I guess the reading experience is rated five stars based on your response. You did indeed get a lot of information from the article. I’ll do my best to give you a discount on your subsequent bike ride.
Can you please give some insights on the tax implications of surge pricing in case of the delivery/transport industry in the hands of the company partners. Also is there a incentive in this for listed company partners.
Can you please tell if it will be applicable to service provider company like Urban clap. Do you have any connect with them?
Mr. Joseph
This is applicable on Companies which are listed on stock exchanges.
Do you feel it would curb new companies like Rapido and Ola to get themselves listed?
Mr. Shashtri
Ministry has tried to eased the Compliances on listed company.
What is the procedure to become get companies like Rapido listed? Please guide me.