SEBI had vided its circular no. CIR/CFD/CMD/4/2015 dated September 9, 2015 specified the details that need to be provided while disclosing events given in Part A of Schedule III of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“LODR Regulations”) and guidance on when an event / information can be said to have occurred. The aforesaid circular has now become part of Section V-A of Chapter V of Master Circular issued vide circular no. SEBI/HO/CFD/PoD2/CIR/P/2023/120 dated July 11, 2023 (“Master Circular”).
SEBI has now revised September 9, 2015 circular. The revised circular now has following features:
- Accordingly, this circular consists of four annexures with respect to disclosure requirements under regulations 30 and 30A (inserted by the aforesaid amendment) of the LODR Regulations which are given below:
- Amendment of the LODR Regulations which are given below:
- ANNEXURE I specifies the details that need to be provided while disclosing events given in Part A of Schedule III (Annexure 18 to the Master Circular).
- ANNEXURE II specifies the timeline for disclosing events given in Part A of Schedule III.
- ANNEXURE III provides guidance on when an event / information can be said to have occurred (Annexure 19 to the Master Circular).
- ANNEXURE IV provides guidance on the criteria for determination of materiality of events / information.
- Ratings: Till now only issue of credit ratings were required to be disclosed. Now with the revised circular listed entity will have to notify the stock exchange(s), the details of any revision in rating assigned from a credit rating agency to any debt instrument of the listed entity or to any fixed deposit program or to any scheme or proposal of the listed entity involving mobilization of funds whether in India or abroad. In case of a downward revision in ratings, the listed entity shall also intimate the reasons provided by the rating agency for such downward revision.
- The above requirement to disclose rating shall also be applicable to the following:
- Revision in rating even if it was not requested for by the listed entity or the request was later withdrawn by the listed entity.
- Revision in rating outlook even without revision in rating score.
- ESG ratings by registered ESG Rating Providers.
- Pendency of any litigation(s) or dispute(s) or the outcome thereof which may have an impact on the listed entity: For ascertaining materiality thresholds in case of pendency of any litigation(s) or dispute(s) or the outcome thereof it is now stated by SEBI that in case the amount involved in ongoing litigations or disputes with an opposing party become material on a cumulative basis, then the same shall also be required to be disclosed to the stock exchange(s). This clarity would help in disclosure of material information.
- Delay or default in the payment of fines, penalties, dues, etc. to any regulatory, statutory, enforcement or judicial authority: In case of delay or default in payment of fines, penalties, dues etc. it is now stated by SEBI that inaddition to the above, details of payment including date of payment and amount paid shall be disclosed upon payment of the fines, penalties, dues, etc.
- Disclosure within thirty mins: SEBI has also stated that in case any agenda item is discussed in the board meeting of listed entity then it shall be disclosed within 30 mins from the conclusion of board meeting even if timeline of 12 hours if provided.
- Exploring avenues by Listed entity: SEBI has further stated that in case of in-principal approval or approval to explore (which is not final approval) is given by the Board of Directors, the same shall not require disclosure under regulation 30 of the LODR Regulation. This assertion gives clarification that it is not necessary to intimate stock exchange when company is exploring something and that information is not final.
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