Post on 23-Mar-2018
P a g e 1 | 17
SEBI’s New Listing Regulations-Old Wine in New Bottle!!
The discipline of writing something down is the first step toward making it happen. Lee Iacocca
SEBI with the objective of bringing the basic framework governing the regime of Listed Entities
in line with the Companies Act, 2013 and at the same time compiling all the mandates of varied
SEBI Regulations/Circulars governing Equity as well as Debt segments of capital market under
the ambit of a single document, has notified SEBI (Listing Obligations and Disclosure
Requirements) Regulations (hereinafter referred as “LODR” or “Listing Regulations”) on
September 02, 2015, thereby giving all the listed entities and Stock Exchanges, a time span of
90 days to implement the said Listing Regulations.
However, following two provisions of the LODR have become applicable with immediate effect:
1. Passing of an 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 terms of Regulation 23 (4);
2. Reclassification of Promoters as public shareholders under special circumstances
prescribed in Regulation 31A.
In the Regulations, while many of the existing provisions of the Listing Agreements have
been retained, but at the same time, many new obligations have also been cast on the Listed
Companies and their Boards/ KMPs.
The broad framework of Listing Regulations are outlined as follows:
Chapter I: Preliminary Section prescribing the scope of the Listing Regulations;
Chapter II: Guiding Principles Governing Disclosures & Obligations of Listed Entity
Chapter III: Common Obligations of Listed Entities
Chapter IV: Applicability on such entities whose specified securities are listed on the Stock
Exchanges
Chapter V & VI: Applicability on such entities whose Non-Convertible Debt Securities or Non-
Convertible Redeemable Preference Shares are listed on the Stock Exchanges
Chapter VII: Applicability on such entities whose Indian Depository Receipts are listed on the
Stock Exchanges
Chapter VIII: Applicability on such entities whose Securitised Debt Instruments are listed on
the Stock Exchanges
Specified Securities means equity shares and convertible securities;
P a g e 2 | 17
Chapter IX: Applicability on such entities whose Mutual Fund Units are listed on the Stock
Exchanges
Chapter X & XI: Duties & Obligations of the Recognized Stock Exchange(s) and provisions for
action in case of default
Chapter XII: Miscellaneous Provisions
In this Newswire, a gist of some important provisions of LODR vis-à-vis erstwhile Equity
Listing Agreement, in respect of Specified Securities (i.e. Chapters I to IV) are chalked
down as follows:
Regulations as
per SEBI Listing
Regulations, 2015
Premise of the said Regulation Remarks
CHAPTER I
Regulation 2 Contains various definitions, in
the context of listed entities &
listed securities
-
CHAPTER III
Regulation 7:
Share Transfer
Agent
Listed entities are required to submit
a compliance certificate duly certified
by both the Compliance Officer and
the authorized representative of
Share Transfer Agent to the Stock
Exchanges where their specified
securities are listed within 1 (one)
month of end of each half of the
financial year.
This Regulation is a
substitution of Clause 47 (c) of
the erstwhile Listing
Agreement. Earlier, this
Certificate was required to be
obtained from a PCS but as
per LODR, the same is
required to be certified by the
Compliance Officer of the
Listed Entity and authorized
representative of Share
Transfer Agent.
Regulation 9:
Preservation of
Documents
The listed company is required to
formulate a policy for preservation
of documents duly approved by the
Board of Directors, classifying them
in at least two categories as follows-
(a) documents whose
preservation shall be
permanent in nature;
(b) documents with
preservation period of not
less than eight years after
completion of the relevant
transactions.
This Regulation is, to some
extent, in line with the
provisions of Companies Act,
2013 and would ensure better
governance in the operations
of the company.
On combined reading of this
Regulation and Regulation 30
(8) of LODR, it is construed
that the policy is required to be
updated on the functional
website of the Company.
P a g e 3 | 17
(Maintenance of documents in
electronic mode will be deemed to be
complying with the aforesaid
regulation.)
Regulation 12:
Payment of
dividend, interest,
redemption or
repayment.
Every listed entity is required to
make use of E-payment facility as
approved by RBI for the purpose of
making payment of the following:
a. Dividends;
b. Interest;
c. Redemption or Repayment
Amounts.
In this regard, where it is not possible
to use e-payment facility then
‘payable-at-par warrants’ or cheques
may be issued.
If the amount of Dividend is Rs
1,500/- or more, the ‘payable-at-par
warrants’ or cheques shall be sent by
speed post
To ensure transparency on
one hand and on the other, in
the interest of shareholders at
large, this Regulation
facilitates extension of e-
payment facility in respect of
payment of dividend, interest,
Redemption or Repayment
Amounts.
Regulation 13:
Grievance
Redressal
Mechanism
Every listed company is required to
comply with the following:
a. To get itself registered on the
SCORES platform or any
other similar platform to
electronically handle the
investor complaints as
specified by the Board.
b. To file a Statement within 21
days from the end of the
relevant quarter to the stock
exchange pertaining to the
status of investors complaints
detailing the following
information:
No. of Complaints
Pending:
pending at the
beginning,
Received and
disposed of during
the quarter,
To ensure timely redressal of
investors’ complaints and
accountability to the
stakeholders at large, a new
provision pertaining to
submission of Pending
Investor Complaints Report to
the Stock Exchanges has
been inserted.
In the erstwhile Listing
Agreement, the information
pertaining to pending
investors complaints were
being submitted on a quarterly
basis only along with the
Financial Results required to
be filed with the stock
exchange within 45/60 days
(as the case may be) from the
end of the relevant quarter.
P a g e 4 | 17
Unresolved at the
end of the quarter;
c. The said statement is also
required to be placed before
the Board of Directors on a
quarterly basis.
CHAPTER IV
Regulation 16 to 27:
Corporate
Governance
The main highlights of the Corporate
Governance are outlined as follows:
(1) Provisions of Corporate
Governance are not applicable
on:
a. the listed entity having paid
up equity share capital not
exceeding Rs 10 Cr and
Networth not exceeding Rs
25 Cr , as on the last day of
the previous financial year;
b. the listed entity which has
listed its specified securities
on the SME Exchange.
(2) The Listed entities other than
mentioned in Para (1) above, are
required to:
a. Formulate a Policy on
material related party
transactions and dealing with
related parties.
b. Seek approval from
shareholders in General
Meeting by passing an
ordinary resolution for
approving material related
party transactions subject
to the stipulation that such
related parties shall be
abstained from voting on
such resolution.
With the intent to harmonize
the provisions with the
Companies Act, 2013, the
requirement of shareholder
approval for material related
party transaction has been
relaxed from Special
Resolution to Ordinary
Resolution.
The provisions of Cl 49 of
erstwhile Listing Agreement
have by and large been
replicated in the LODR as
well.
P a g e 5 | 17
Regulation 28:
Prior In Principle
approval
The Listed company, prior to
issuance of securities is needed to
obtain an In Principle approval
This provision is in line with Cl
24(a) of erstwhile Listing
Agreement.
Regulation 29:
Prior Intimations
The listed company is required to
give prior intimation to Stock
Exchange about the Board Meeting
held, from time to time, in the
following manner:
a. For Financial Results: At
least 5 days advance notice
(excluding the date of
intimation and date of
meeting) before
consideration of Financial
Results of the company.
b. For Corporate Actions: At
least 2 working days advance
notice (excluding the date
of intimation and date of
meeting) for considering the
proposals related to buyback
of securities, voluntary
delisting, fund raising
including determination of
issue price.
c. For alteration in the date of
payment of interest or
nomenclature of the
specified securities: At
least 11 working days’
advance notice for
considering the proposals
pertaining to:
(i) Change in
nomenclature of any
of the securities listed
on the Stock
Exchange;
(ii) Alteration in the date
on which,
The New Regulations,
have introduced some
additional business(es)
pertaining to which prior
intimation of Board Meeting is
required to be forwarded to the
Stock Exchanges and have
also prescribed the
computation of requisite
timeframe for sending the
afore stated prior intimation.
P a g e 6 | 17
the interest is
required to be paid
on debentures or
bonds;
the redemption
amount is required to
be paid on
redeemable shares
or debentures or
bonds.
Regulation 30:
Disclosure of
Events or
Information.
The main highlights of the Regulation
are outlined as follows:
a. The responsibility is cast on
the Board of listed entities, to
authorize one or more KMPs
for the purpose of
determining materiality of an
event or information and
making disclosures to the
stock exchange.
b. The details of above stated
authorized KMPs is required
to be disclosed to the Stock
Exchange(s) as well as on
the Company’s website.
c. Every Listed Company is
required to update material
developments on a regular
basis pertaining to the
disclosures made till the
event is resolved/closed and
host the said events along
with all updated information
on its website at least for a
period of 5 years.
d. Post 5 years, the requirement
of disclosure of such events
is as per the archival policy of
the Listed Company.
e. All events or information of
material subsidiaries are to
The provisions of this
Regulation have removed all
the ambiguities of Clause 36
of the erstwhile Listing
Agreement and addition of
provisions related to
explanation for delay in
disclosure would surely bring
more transparency in the
business affairs of the
Company.
Further, SEBI vide its Circular
dated September 09, 2015
clearly prescribed the
information needed to be
disclosed pertaining to
material transactions as
prescribed in Regulation 30 of
LODR. This circular brings in
more clarity of what to disclose
and will ensure uniformity in
disclosures made by listed
entities and shall come into
force after 90 days from the
date of issuance of LODR
Regulations.
P a g e 7 | 17
be disclosed by such listed
entity.
f. Material event/ information
are needed to be disclosed
as per the following timeline:
Within 24 hours from
the occurrence of the
events as specified in
Part - A of Schedule III
of the said regulations.
Within 30 minutes of
the conclusion of the
Board Meeting
regarding events
specified in sub-para 4
of Para A of Part A of
Schedule III of the said
regulations.
g. Any delay in filing disclosures
beyond the timeframe of 24
hours shall be accompanied
by an explanation for delay.
Regulation 31:
Holding of Specified
Securities and
Shareholding
pattern
(1) The listed entity shall submit
to the stock exchange(s) a
statement showing holding of
securities and shareholding
pattern separately for each
class of securities within 21
days from the end of
respective quarter.
(2) If the entity is listed on SME
Exchange, the above
statement is to be filed on a
half yearly basis within 21
days from the end of each
half year.
Regulation 31 has duly
replaced Clause 35 of the
erstwhile Listing Agreement.
Regulation 31(A):
Disclosures of
Class of
Shareholders and
Conditions For
Reclassification
The Stock Exchange may allow for
reclassification upon receipt of a
request from the listed company or
the concerned shareholder, along
with requisite evidence. The
reclassification will be allowed
To resolve the ambiguities as
to re classification, SEBI has
inserted this regulation to
place a regulatory framework
for re-classification of
promoters in listed companies
P a g e 8 | 17
subject to compliance of specified
conditions.
I. Reclassification of Promoter as
Public Shareholder
A. In case of change in Promoter:
When a new promoter replaces the
previous promoter subsequent to an
open offer or in any other manner, re-
classification shall be permitted
subject to approval of
shareholders in the general
meeting.
Shareholders need to specifically
approve whether the outgoing
promoter can hold any KMP position
in the company. In any case, the
outgoing promoter cannot act as
KMP for a period of more than 3
years from the date of
shareholders’ approval.
The outgoing promoter along with
the promoter group and persons
acting in concert cannot hold more
than 10% of the paid-up equity
share capital of the company and
shall not have any special rights
through any formal or informal
arrangements.
B. In case of Inheritance:
In case of
transmission/succession/inheritance
, the inheritor shall be classified as
promoter.
as public shareholders under
various circumstances.
P a g e 9 | 17
C. In case of Company not having
any identifiable promoter:
Existing promoters may be re-
classified as public in case the
company becomes professionally
managed and does not have any
identifiable promoter subject to the
approval of shareholders in a
general meeting. A company will be
considered as professionally
managed for this purpose, if:
i. No person or group along with
Persons Acting in Concert (PACs)
taken together holds more than
1% of the paid-up equity share
capital of the company (including
any convertibles/outstanding
warrants/ADR/GDR Holding).
ii.Mutual Funds/Banks/Insurance
Companies/ Financial
Institutions/FPIs can each hold up to
10% of the paid-up equity share
capital of the company (including any
convertibles/outstanding
warrants/ADR/GDR Holding).
iii. Erstwhile promoters and their
relatives may hold KMP position in
the company only subject to
shareholders’ approval and for a
period not exceeding 3 years from
the date of shareholders’ approval.
iv. The outgoing promoter shall not
have any special rights through any
formal or informal arrangements.
D. Other Conditions:
P a g e 10 | 17
(i)The outgoing promoter shall not,
directly or indirectly, exercise control
over the affairs of the company.
(ii) Increase in public
shareholding pursuant to re-
classification of promoters shall not
be counted towards achieving
compliance with minimum public
shareholding (MPS) requirement
under clause 40A of equity listing
agreement. (iii) The event of re-
classification may be disclosed as a
material event in accordance with the
listing agreement/regulations.
E. Power to relax the provisions
on a case to case basis:
SEBI may relax any condition for
reclassification in specific cases, if it
is satisfied about non-exercise of
control by the outgoing promoter or
its person acting in concert.
II. Reclassification of Public
Shareholder as a Promoter:
Then Public shareholder is required
to make an open offer in accordance
with the provisions of SEBI (SAST)
Regulations, 2011.
Regulation 32:
Statement of
deviation(s) or
variation(s)
(1) The listed entity shall
submit to the stock exchange the
following statement(s) on a
quarterly basis for public issue,
rights issue, preferential issue
etc. ,-
This Regulation has duly
replaced the provisions of
Clause 43A and Clause
49(VII)(I) of the erstwhile
Listing Agreement.
P a g e 11 | 17
(a) indicating deviations, if
any, in the
use of proceeds from the
objects stated;
(b) indicating category wise
variation between
projected utilisation of
funds and the actual
utilisation of funds.
(2) The above statement is
required to be reviewed by the Audit
Committee prior to its submission
and to be given till the issue
proceeds have been fully utilised
or the purpose for which these
proceeds were raised, has been
achieved ;
(3) The variation is required to be
furnished in the Directors Report as
well on an annual basis;
(4) If the listed company has
appointed any monitory agency
then the report/comments of such
agency is required to be
submitted
In case of SME listed entities, the
said Deviations statement is
required to be furnished on semi-
annual basis.
Regulation 33:
Financial Results
The listed company shall submit to
the stock exchange the following:
a. Audited or unaudited
quarterly and year-to-date
standalone financial results
to the stock exchange within
45 days from the end of
relevant quarter.
Regulation 33 has duly
replaced Clause 41 of the
erstwhile Listing Agreement.
P a g e 12 | 17
b. In case the listed company
has subsidiaries, then it may
submit also quarterly/ year-
to-date consolidated financial
results of its subsidiary.
c. Audited standalone financial
results along with the audit
report for the financial year,
within 60 days from the
relevant financial year.
In respect of companies listed on
SME Exchange, the quarterly results
needed to be submitted on a half
yearly basis and ‘year-to-date’
financial results are not required to
be filed to the stock exchanges.
Regulation 34:
Annual Report
1. The listed company is required to
submit the Annual Report to the
Stock Exchange within 21
working days of it being approved
and adopted in the Annual
General Meeting.
2. The disclosures as sought in the
Regulation are needed to be
incorporated in the Annual
Report.
While the erstwhile Listing
Agreement cast the obligation
for submission of Annual
reports to the Stock
Exchanges, as soon as they
were issued. However, this
Regulation mandates for filing
of Annual Reports within 21
working days of the AGM.
Regulation 35:
Annual Information
Memorandum
The annual Information
Memorandum is needed to be
submitted by the listed entities to the
stock exchange, in the manner as
may be specified by SEBI from time
to time.
The Regulations ensure
disclosure of updated
information to the
stakeholders at large on a
regular basis to facilitate them
to take well informed decision
pertaining to making
investment in the Company or
not.
Regulation 36:
Documents &
Information to
Shareholders
The listed company is required to
submit its Annual Report to the
shareholders in the following
manner:
For shareholders, who have their
Ids registered with the Company,
soft copy of the full Annual
Report;
The Annual Reports are
needed to be send to the
shareholders at least 21 days
before the AGM.
P a g e 13 | 17
For the ones who don’t have their
Ids registered, hard copy of the
statement containing salient
features, in terms of Sec 136 of
Companies Act 2013;
Hard copies of full Annual
reports, to the shareholders who
request for the same.
Regulation 37:
Draft Scheme of
Arrangement
Any listed company desirous of
undertaking a Scheme of
Arrangement shall prior to filing it
with High Court/ Tribunal, file the
same with the Stock Exchanges
and obtain a NOC/ Observation
Letter from the Exchange(s).
The Observation Letter or No-
objection Letter granted by the
stock exchange prior to
presenting scheme before the
Court or the Tribunal will be valid
for the period of 6 months from
the date of its issuance.
The Regulation prescribes
provisions in line with the
Circulars issued by SEBI on
February 4, 2013 and May 21,
2013 pertaining to No-
Objection for the draft scheme
of arrangement.
Regulation 38:
Minimum Public
Shareholding
All listed companies have to comply
with Minimum Public Shareholding
norms, as laid down in Rule 19(2)
and 19A of SCRR, in the manner
specified by SEBI from time to time.
While the erstwhile Cl 40A of
Listing Agreement even
mandated for the modes of
complying with MPS norms,
this Regulation, presently is
silent on the same.
Regulation 39:
Issuance of
Certificates or
Receipts/Letters/Ad
vices for securities
and dealing with
unclaimed
securities
(1) The listed company would be
required to issue certificates
or receipts or advices
pursuant to subdivision, split,
consolidation, renewal,
exchanges, endorsements,
issuance of duplicates
thereof or new certificates or
receipts or advices, as
applicable, in cases of loss or
old decrepit or worn out
certificates or receipts or
advices, as applicable within
a period of thirty days from
the date of such
lodgement.
The time period of 15 days for
issuance of certificates or
receipts on prescribed events
has been enhanced to 30
days.
P a g e 14 | 17
(2) The listed company is
required to submit the
information regarding loss of
share certificate and issue of
the duplicate certificate, to
the stock exchange within
two days of its getting
information.
Regulation 40:
Transfer or
transmission or
transposition of
securities.
The main highlights are outlined as
follows:
a. The Board of Directors of a
listed company may delegate
the power of transfer of
securities to a committee or
to compliance officer or to the
registrar to an issue and/or
share transfer agent.
b. The delegated authority is
required to review the
formalities relating to transfer
of securities atleast once on a
fortnightly basis and shall
report to the Board on
transfer of securities in each
meeting.
c. The listed company shall not
effect the transfer in
securities if the transferor
serves prohibitory order of a
competent court within 60
working of raising the
objection.
The Clause 12(c) of the
erstwhile listing agreement
doesn’t specify the time limit
for serving the prohibitory
order of the court which is
being clearly specified in this
regulation.
Further, the delegation of
authority will simplify the
provisions for the Company as
well.
Regulation 42:
Record Date or Date
of Closure of
Transfer Books
a. The listed entity is required to
intimate the record date/ book
closure date to all the concerned
Stock Exchanges at least 7
working days (excluding the date
of intimation and the record date)
before the record date/ closure of
transfer books.
b. The listed entity is required to
declare dividend/ cash bonuses
at least 5 working days (excluding
In the Regulations, it is
clarified that the requirement
of maintaining time lag of 30
days is between 2 Record
Dates or between 2 Book
Closures.
Accordingly, it is inferred that if
the Record date and Book
closure are needed to be
fixed, then the requirement of
P a g e 15 | 17
the date of intimation and the
record date) before the record
date fixed for that purpose.
c. There must be gap of minimum
30 days between two record
dates or two transfer book closure
dates.
maintaining 30 days’ time lag
would not be applicable.
Regulation 45:
Change in name of
the listed entity
(1) The listed company desirous to
change its name is required to file
an application for change in name
with ROC subject to the
compliance with the following
conditions:
i. One year must have been
elapsed from its last
name change.
ii. Aleast 50% of the total
revenue in the preceding
one year has been
generated from the
activity suggested by the
new name.
iii. The amount invested in
the new activity must be
at least 50% of the assets
of the company.
(2) The line of business undertaken
by the company must be in line
with its name. However, if there is
any deviation between the same,
then the company is required to
comply with the relevant
provisions of the Companies Act,
2013 for change in name, within 6
months from the date of change
in line of business.
(3) The listed company shall file an
application for name availability
with ROCs upon satisfying the
conditions laid down in Para (1)
above.
Under the erstwhile Cl 32 of
the Listing Agreement, this
condition of not even being
able to make an application to
ROC was not there.
Furthermore, on a collective
reading of all the sub
regulations of this Regulation,
there appears to be a
technical issue. Proviso to
Sub Regulation (1) says that if
a new line of activity has been
started, which is not reflected
in the company’s name, it
must change its name within a
period of 6 months. On the
contrary, Sub Regulation
(1)(b) mandates that at least
50% of the revenue in
preceding 1 year must have
been accounted for from the
new activity.
This provision might need a
relook.
P a g e 16 | 17
(4) After receipt of confirmation
regarding name availability from
the ROC, the listed company is
also required to obtain the
approval from the concerned
stock exchange for the change in
name prior to filing the request for
change of name to ROC.
Regulation 46:
Website
The listed company is required to
update any change in the content of
its website within 2 working days
from the date of such change in the
content.
This regulation provides clarity
as the erstwhile listing
agreement was silent
regarding updation of contents
on the website of the
company.
Regulation 47:
Advertisements in
Newspapers
(1) The listed entity shall publish the
following information in atleast 1
English newspaper, circulating in
whole or substantially whole of
India and in 1 daily newspaper in
the vernacular language, where
the registered office of the
company is situated: :
(a) Notice of meeting of the
Board of Directors where
financial results would be
considered;
(b) Financial results along with
the opinion(s) or
reservation(s), if any,
expressed by the Auditor
within 48 hours of conclusion
of the meeting of Board of
Directors;
(c) Statements of deviations/
variations
(d) Notices given to
shareholders by
advertisement
(2) The above provisions are not
applicable on the entities listed
on SME Exchange.
This Regulation has provided
an ease of reference by
summarizing the provisions of
Newspaper publications which
in erstwhile Listing Agreement
was mentioned in separate
clauses.
P a g e 17 | 17
CP’s Viewpoint:
In our view, the introduction of LODR is a welcoming move of SEBI that aims at streamlining
the existing listing agreements for varied instruments of the capital market into one single
document across various types of securities listed on the stock exchanges. However, there are
two major concerns arising from the Regulations that need to be addressed. One is pertaining
to the provisions for filing of Annual Report with the Stock Exchanges post AGM and another
is pertaining to change in name of the listed entities.
For any clarifications or Professional Advisory, feel free to contact:
Ms. Anjali Aggarwal Partner & Head: Capital Markets & Stock Exchange Services M: +91 9971673336 Ph: 011-40622230 Email: anjali@indiacp.com
Disclaimer: - The entire contents of this document have been developed on the basis of relevant statutory provisions and the information available at the time of the preparation. Though the author has made utmost efforts to provide authentic information however, assumes no responsibility for any errors which despite all precautions, may be found herein. The material contained in this document does not constitute/substitute professional advice that may be required before acting on any matter. The author and the company expressly disclaim all and any liability to any person who has read this document, or otherwise, in respect of anything, and of consequences of anything done, or omitted to be done by any such person in reliance upon the contents of this document.