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SEBI notified Revised Listing Regulations, 2015

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Capital market regulator The Securities and Exchange Board of India (SEBI) has notified SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 which amended listing regulations that allow listed companies to seek shareholders’ approval for related party deals through ordinary resolutions.

As per the notification, a time period of ninety days has been given for implementing the Regulations.  However, two provisions of the regulations in the revised rules, which are facilitating in nature, are applicable with immediate effect.

Highlights of the Listing Regulations:

  • The Regulations, 2015 (Listing Regulations) have been divided into two parts. They are –
  1. Substantive provisions incorporated in the main body of regulations and
  2. Procedural requirements in the form of schedules to the regulations.
  • The two provisions which came into effect immediately are –
  1. The first one belongs to passing of ordinary resolution instead of special resolution in the 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.
  2. Another one relates to re-classification of promoters as public shareholders under various circumstances.
  • The latest set of norms also provides broad principles for periodic disclosures by listed entities, apart from incorporating corporate governance principles.
  • A shortened version of the listing agreement would be prescribed and has to be signed by the company. Furthermore, existing listed entities will be required to sign the same within six months of the notification of the regulations.
  • 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, action can be taken against the entities.

Significance:

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. This would further streamline the provisions of existing listing agreements for different segments of the capital market namely equity, including convertibles bonds, issued by entities listed on the main board of the stock exchanges, small and medium enterprises listed on SME Exchange and Institutional Trading Platform, non-convertible debt securities, non-convertible redeemable preference shares, Indian depository receipts, securitized debt Instruments and units issued by mutual fund schemes.