SEBI has notified SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015 (‘Listing
Regulations’). A time period of 90 days has been allowed to companies to
implement these regulations. However, two provisions of the regulations shall
be applicable with immediate effect namely,
i.
Rules governing passing of
ordinary resolution instead of special resolution in case of all material
related party transactions and
ii.
Rules on re-classification of
promoters as public shareholders under various circumstances.
With a view to provide ease of
reference, regulations have been structured by consolidating into one single
document across various types of securities listed on the Stock exchanges.
The regulations provides for–
Guiding Principles under (Chapter II); Common obligations applicable to all
listed entities under (Chapter III); Obligations which are applicable to
specific types of securities under (Chapter III to IX); Obligations of stock
exchanges and provisions in case of default under (Chapter X & XI); Ease of
Reference; and ensures streamlining and segregation of initial issuance/listing
obligations;
Further, wherever necessary,
the provisions in Listing Regulations have been aligned with those of the
Companies Act, 2013. The regulations prescribe a short version of the Listing
Agreement of approximately (2 pages) which would be made available very soon.
The short version of Listing Agreement is required to be signed by a company
getting its securities listed on Stock Exchanges
It is to be noted that
the Listing regulations consolidates and streamlines the provisions of
Key highlights of the
regulations are outlined as under:
1.
Applicability: The regulations
shall apply to the listed entity who has listed any of the designated
securities on recognised stock exchange(s)
2.
Common Obligations Of Listed
Entities: The listed entity shall have to ensure that key managerial personnel,
directors, promoters or any other person dealing with the listed entity,
complies with responsibilities or obligations, if any, assigned to them under
these regulations
3.
Related party transactions: The
regulation allows companies to approve any material related party transactions
by passing an ordinary resolution instead of special resolution however, it
should be noted that the related parties shall have to abstain from voting on such
resolutions.
So far, SEBI norms required a
vote by two-thirds of majority shareholders for a special resolution before a
related-party transaction could be passed. This has now been reduced to 50%, on
the lines of the Companies Act. The move would make it easier for listed
companies to clear such deals.
4.
Appointment of Company
Secretary as Compliance Officer: A listed entity shall appoint a qualified
company secretary as the compliance officer who shall be responsible for
ensuring conformity with the regulatory provisions applicable to the listed
entity in letter and spirit; co-ordination with and reporting to the Board,
recognised stock exchange(s) and depositories with respect to compliance with
rules, regulations and other directives; Monitoring of grievance redressal
division. This move would open a world of opportunities for Company Secretaries
profession.
5.
Principles governing
disclosures and obligations: The listed entity shall make disclosures and abide
by its obligations under the regulations in accordance with the
i)
preparation and disclosure of
information in accordance with applicable AS and financial disclosure
ii)
Conduct of audit by an independent, competent and qualified
auditor.
iii)
Refraining from providing
misrepresentation to recognised stock exchange(s) and not misleading the
investors.
iv) Providing
adequate and timely information to recognised stock exchange(s) and investors
v)
Filings, reports, statements,
documents and information which are event based or are filed periodically shall
contain relevant information etc.
