Summary: The 208th SEBI Board meeting held on December 18, 2024, introduced several key changes to enhance regulatory processes. Amendments were made to the definition of Unpublished Price Sensitive Information (UPSI) under SEBI PIT Regulations, including 17 new items from the material events list under SEBI LODR. The threshold limits for UPSI identification were also aligned with SEBI LODR guidelines. Flexibility was introduced for events from outside the company, allowing deferred database entries and removing mandatory trading window restrictions. In the area of Business Responsibility and Sustainability Report (BRSR), SEBI deferred ESG disclosures and assurance for value chains by one year and made reporting voluntary for certain ESG aspects. Additional flexibility was introduced for identifying value chains and reducing the scope for disclosures. A new leadership indicator was added for Green Credits disclosures. Regarding corporate governance, the Board raised the threshold for identifying High Value Debt Listed Entities (HVDLEs) from Rs. 500 crore to Rs. 1000 crore and introduced provisions for easier governance norms, including more flexibility for committees. Additionally, debt listed entities with significant related-party shareholders will need approval from the Debenture Trustee for material related-party transactions from April 1, 2025. These changes aim to improve ease of business and governance standards in the Indian securities market.
THE SEBI BOARD, INTER-ALIA, APPROVED THE FOLLOWING IN ITS 208TH MEETING CONVENED ON DECEMBER 18, 2024:
♦ Amendments to include events in the illustrative list of the definition of UPSI under SEBI PIT Regulations, 2015.
1. The amendments to the definition of UPSI under Regulation 2(1)(n) of SEBI PIT Regulations was approved by including in the illustrative list, 17 out of the 27 items not already covered from material events requiring disclosures under Regulation 30 of SEBI LODR.
2. In addition, for identification of events as UPSI, threshold limits as prescribed for events in Schedule III of SEBI LODR have been made applicable.
3. Further, for events emanating from outside the company, flexibility has been provided to make entries in the structured digital database on a deferred basis, within 2 days, as well as to not have mandatory trading window This has been done to enhance the ease of doing business.
♦ Ease of doing business with respect to Business Responsibility and Sustainability Report (BRSR)
1. Deferring ESG disclosures for value chain, as well as “assessment or assurance” thereof, by 1 year i.e., shall apply from FY 2025-26 (as against the current requirement of FY 2024- 25) and “assessment or assurance” thereof shall be applicable from FY 2026-27 (as against the current requirement of FY 2025-26).
2. Providing ESG disclosures for value chain shall be “voluntary”, instead of the present requirement of ‘comply-and-explain’.
3. Reducing the scope of value chain to cover the top upstream and downstream partners of a listed entity, individually comprising 2% or more of the listed entity’s purchases and sales (by value), respectively, while providing that the listed entity may limit disclosure of value chain to cover 75% of its purchases and sales (by value), respectively.
4. Reporting of previous year numbers will be voluntary in case of first year of reporting of ESG disclosures for value chain.
5. Introduction of a leadership indicator in Principle 6 of BRSR for disclosure of Green Credits generated or procured by the listed entity and its top-10 value chain partners.
6. Substitution of “assurance” with “assessment or assurance” in SEBI LODR, regarding BRSR. “Assessment” will be third-party assessment undertaken as per standards to be developed by the Industry Standards Forum (ISF) in consultation with SEBI. This would be applicable for BRSR Core disclosures for listed entities and value chain from FY 2024-25 and FY 2026-27 onwards, respectively.
♦ Review of provisions regarding corporate governance norms for High Value Debt Listed entities (HVDLEs)
1. Increase in threshold for identification of HVDLE from Rs.500 cr to Rs. 1000 cr. This enhanced limit align the HVDLE with the threshold specified for Large Corporates.
2. Introduction of a separate chapter, and a sunset clause for corporate governance norms in the LODR Regulations which will be applicable to entities which have only debt listed securities, to facilitate ease of reference.
3. Increased flexibility on the constitution of the Nomination and Remuneration Committee, Risk Management Committee and Stakeholder Relationship Committee by HVDLEs.
4. HVDLEs shall be included in computation of listed entities while counting the ceiling on the number of directorships, memberships or chairpersonships so as to ensure that a director is able to give adequate attention to each listed entity. The restriction on maximum number of directorships shall not apply for directorships that arise due to ex-officio position by virtue of statute or applicable contractual framework in case of PSUs and entities set up under the Public Private Partnership (PPP) mode respectively.
5. For debt listed entities where the shareholding is wholly/ substantially held by one or a few related party shareholders, material RPTs shall require NOC from the Debenture Trustee (who in turn shall obtain debenture holders’ approval).
The said NOC shall be obtained before seeking shareholder’s approval on the same through resolution. If the NOC has been withheld, the matter shall not be taken forward for shareholders’ consideration/ action. This shall be applicable for RPTs undertaken by HVDLEs from April 01, 2025 onwards.
Link to the document- https://www.sebi.gov.in/media-and-notifications/press-releases/dec-2024/sebi-board-meeting_90042.html
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