SEBI’s Amendment Regulations 2024: Overhaul of Listing Obligations and Disclosure Requirements

On May 17, 2024, the Securities Exchange Board of India (‘SEBI’) issued the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2024 hereinafter referred as ‘Amendment Regulations, 2024’. This new amendment aims to revise and enhance the existing Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Amendment Regulations, 2024 are designed to improve the transparency and accountability of listed companies, ensuring better compliance with disclosure norms and listing obligations. The Amendment Regulations, 2024 reflect SEBI's ongoing commitment to adapt to the evolving market landscape and address the needs of investors and other stakeholders.

Key considerations of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2024

Previously, Regulation 3(2) stated that the provisions based on market capitalisation criteria would continue to apply to listed entities even if their market capitalisation fall below the specified thresholds.

The updated regulation now specifies that:

  1. On December 31st each year, stock exchanges are required to compile a list of entities ranked by their average market capitalisation.
  2. After 3 months from December 31st, the relevant provisions will become applicable to any listed entity required to comply with these requirements.
  3. Any entity complying for the first time, or resuming compliance after a period of non-compliance, must establish systems and processes to ensure compliance with Regulation 34(2)(f) within three months from December 31st or the start of the immediate next financial year.
  4. Disclosures must be made annually in accordance with the Business Responsibility and Sustainability Report Core.
  1. Continuation and Cessation of Applicability Based on Market Capitalization:

New sub-regulations (2A) and (2B) has been inserted which state that:

  1. In case of change of rank, the entity will fall outside the purview of the provisions which become applicable to a listed entity based on the market capitalisation.
  2. The provisions will cease to apply at the end of the financial year after December 31st of the third consecutive year.
  1. Issue Price Intimation:

A new proviso has been added to Regulation 29(1) stating that if a placement is conducted in accordance with the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, no intimation regarding the determination of the issue price in a qualified institutions placement is required.

  1. Uniform’ Two-Day Notice’ for Stock Exchange Intimations:

Previously, the listed entity was required to intimate the stock exchange for a board meeting as follows:

  1. Board meeting for Buyback, Dividend, Raising of Funds, Voluntary Delisting, Bonus – At least two working days in advance
  2. Board meeting for Financial Results- At least five working days in advance
  3. Board meeting for alteration in nature of securities, alteration in the date on which, the interest on debentures or bonds, or the redemption amount of redeemable shares or debentures or bonds- At least eleven working days in advance

Now, SEBI has specified two working days before intimation for all events prescribed under Regulation 29. Prior intimation given to the stock exchange under Regulation 29 will now have to mention the date of the board meeting when the proposals will be discussed.

  1. Price Movement and Information Confirmation:

A new proviso to Regulation 30(11) has been added, stating that when the listed entity confirms any reported event or information, on which pricing norms provided under legislations as mentioned in the proviso are applicable, within 24 hours, then the effect on the price of the equity shares of the listed entity due to the material price movement and confirmation of the reported event or information may be excluded for calculation of the price for that transaction.

Regulation 30(11A) has been introduced, requiring promoters, directors, key managerial personnel, or senior management of a listed entity to provide adequate, accurate, and timely responses to queries or explanations sought by the listed entity. This ensures compliance with sub-regulation 11, and such information must be shared by the listed entity with the stock exchanges.

The amendments to the following regulations will come into force on December 31, 2024:

  1. Regulation 3- Applicability of the regulations;
  2. Regulation 17- Board of Directors;
  3. Regulation 21(5)- Risk Management Committee;
  4. Regulation 25- Obligations with respect to independent directors;
  5. Regulation 30- Disclosure of events or information;
  6. Regulation 34- Annual Report;
  7. Regulation 43A- Dividend Distribution Policy;
  8. Regulation 44- Voting by shareholders.

Provisions other than those stated above became effective on May 17, 2024.

Source:

Securities and Exchange Board of India, Notification No. SEBI/LAD-NRO/GN/2024/177 dated 17.05.2024. The Notification of Amendment Regulations, 2024 may be viewed at: