BRIEF OF SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations)

BRIEF OF SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations)

In exercise of the powers conferred by section 11, sub-section (2) of section 11A and section 30 of the Securities and Exchange Board of India Act, 1992 (15 of 1992) read with section 31 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956), the Securities and Exchange Board of India hereby makes the following Regulations, namely:—

Date of Publication in Official Gazette:          September 2, 2015

Date of Applicability:                           December 1, 2015

Brief on SEBI Listing Obligation:

The Securities and Exchange Board of India (SEBI) has notified SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations) on September 2, 2015, after following the consultation process.

 A time period of ninety days has been given for implementing the Regulations.  

Provisions effective immediately:

Two provisions of the regulations, which are facilitating in nature, are applicable with immediate effect. These pertain to

(i)  passing of ordinary resolution instead of special resolution in case of all material related party transactions subject to related parties abstaining from voting on such resolutions, in line with the provisions of the companies Act, 2013, and

(ii) (ii) re-classification of promoters as public shareholders under various circumstances.

Salient Features

Aligned with Companies Act, 2013:

The Securities and Exchange Board of India (SEBI) provisions for listed entities have been aligned with those of the Companies Act, 2013. The latest listing norms, finalised after consultations, will consolidate and streamline the provisions of existing listing agreements for different segments of the capital market.

Parts of Listing Regulation:

The Listing Regulations have been sub-divided into two parts 

(a) Substantive provisions incorporated in the main body of Regulations;

(b) Procedural requirements in the form of Schedules to the Regulations.

The Regulations have been structured to provide ease of reference by consolidating into one single document across various types of securities listed on the Stock exchanges.

Listing Agreement: 

A shortened version of the Listing Agreement (2 page approximately) will be prescribed which will be required to be signed by a company getting its securities listed on Stock Exchanges.  Existing listed entities will be required to sign the shortened version within six months of the notification of the regulations.

Single Document: 

The Regulations have been structured to provide ease of reference by consolidating into one single document across various types of securities listed on the Stock exchanges.

In order to ensure that there is no overlapping or confusion on the applicability of these regulations, pre-listing requirements have been incorporated in respective regulations and post-listing requirements have been incorporated in Listing Regulations.

Other Silent Features: 

·       "All disclosures required to be made on the website of the listed entity have been enumerated at a single place for ease of reference and all requirements pertaining to disclosures in the annual report have been combined.

·       Obligations which are applicable to specific types of securities have been incorporated in separate chapters.

    Stock exchanges will be responsible in ensuring companies comply with the listing obligations, and in the case of non-compliance, they can take action against the entities.

·    In order to ensure there is no overlapping or confusion on the applicability of these norms, pre-listing requirements have been incorporated in respective regulations.

·    

        "These provisions pertain to allotment of securities, refund and payment of interest, one per cent security deposit (in case of public issuance)... post-listing requirements have been incorporated in listing regulations”.

Applicability of Listing Regulations:

Unless otherwise provided, these regulations shall apply to the listed entity who has listed any of the following designated securities on recognized stock exchange(s):

(a)Specified securities listed on main board or SME Exchange or institutional trading platform;

(b)Non-Convertible debt securities, non-convertible redeemable preference shares, perpetual debt instrument, perpetual non-cumulative preference shares;

(c) Indian depository receipts;

(d) Securitized debt instruments;

(e) Units issued by mutual funds;

(f) Any other securities as may be specified by the Board.