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December 2023

One of the key announcements in the Union Budget for FY 2023-24 was to simplify, ease and reduce the cost of compliance and promote ease of doing business. In this regard, a working group was formed to suggest measures for listed debt issuers and review the applicability of the provisions under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the LODR Regulations) and the SEBI (Issue and Listing of Non-Convertible Securities) Regulations, 2021 (the NCS Regulations).

Consequently, based on the feedback received from different stakeholders, in December 2023, SEBI issued a consultation paper on:

  • Review of provisions of NCS Regulations and LODR Regulations for ease of doing business, and
  • Introduction of fast track public issuance of debt securities.

The comment period ended on 30 December 2023.

To access the text of the consultation paper, please click here

The challenges of stressed loans faced by the Indian financial system necessitated regulators exploring AIFs as a potential source of risk capital to supplement the efforts of Asset Reconstruction Companies (‘ARCs’) in resolution of stressed loans. This infusion of capital could help the underlying companies in distress, which are unable to function optimally and generate value for stakeholders due to over-leveraging, but have the potential to turnaround.

In this regard, recently, SEBI issued the consultation paper to amend the SEBI (Alternative Investment Funds) Regulations, 2012 (the AIF Regulations) to make changes in the regulatory framework for SSFs, in order to facilitate the SSFs in acquiring stressed loans in terms of the RBI (Transfer of Loan Exposures) Directions, 2021.

The comment period ended on 27 December 2023.

To access the text of the consultation paper, please click here

The first proviso to Regulation 30(11) of the LODR Regulations requires listed entities to verify and confirm, deny or clarify market rumours which are reported in the mainstream media. This requirement would be applicable to top 100 listed entities w.e.f. 1 February 2024 and to top 250 listed entities w.e.f. 1 August 2024 , as specified by the SEBI circular dated 30 September 2023.

In this regard, on 28 December 2023, SEBI has issued a Consultation Paper on proposed amendments to SEBI Regulations w.r.t. verification of market rumours (the consultation paper). The consultation paper seeks inputs on the following proposals:

  • Material price movement should be the criteria to verify market rumours instead of material events in terms of Regulation 30 of the LODR Regulations
  • Mechanism to ensure that unaffected price is considered w.r.t. the transactions relating to securities of a listed entity upon confirmation of market rumour
  • Obligation on promoters, directors, Key Managerial Personnel (KMP) and senior management to provide adequate, accurate and timely response to the queries raised or explanation sought in respect of market rumours by the listed entity in order to ensure compliance with Regulation 30(11) of the LODR Regulations
  • Classification of information which was not verified by listed entities as unpublished price sensitive information.

The consultation paper is open for comments up to 18 January 2024.

To access the text of the consultation paper, please click here

January 2024

Recently, the Expert Committee for facilitating ease of doing business and harmonisation of the provisions of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 (the ICDR Regulations) and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the LODR Regulations) issued its interim recommendations. The recommendations have been given on the following aspects:

A. LODR Regulations

  • Applicability of the Regulations on the basis of market capitalisation
  • Limit of membership and chairmanship of committees for a director
  • Filling up of vacancies of key managerial personnel
  • Timeline for prior intimation of board meetings
  • Gap between meetings of the Risk Management Committee.

B. ICDR Regulations

  • Inclusion of equity shares received on conversion or exchange of fully paid-up compulsory convertible securities and depository receipts for the purpose of minimum promoters’ contribution
  • Non-individual shareholders to be permitted to contribute towards minimum promoters’ contribution without being identified as a promoter
  • Thresholds for increase or decrease in issue size triggering re-filing of draft offer documents
  • Flexibility to extend the bid/offer closing date on account of force majeure events minimum by one day instead of present requirement to extend by minimum three days.
  • Review of requirement of one per cent security deposit in public/rights issue of equity shares.

The comment period ended on 9 February 2024.

To access the text of the recommendations in the consultation paper, please click here

To access the text of the addendum to the consultation paper, please click here

SEBI has issued a consultation paper to seek comments / views / suggestions from public on the proposal to introduce a requirement that every Alternative Investment Fund (AIF), Manager of the AIF and Key Management Personnel of the Manager and the AIF, should carry out specific due diligence, as may be specified by SEBI from time to time, with respect to their investors and investments, before each investment, to prevent facilitation of circumvention of extant regulations administered by any financial sector regulator.

SEBI would prescribe a framework to specify the objectives and the regulatory principles envisaged to address regulatory circumventions. Such principles would guide the framing of the specific and verifiable standards for due diligence that the stakeholders of the AIF will need to conduct for ascertaining as to whether the participation of an investor in a particular investment of the AIF facilitates circumvention of extant regulation.

Comments are invited up to 11 February 2024.

To access the text of the consultation paper, please click here

SEBI has issued the consultation paper to seek comments / views / suggestions from public on the proposals to provide flexibility to AIFs registered under the SEBI (AIF) Regulations, 2012 (‘AIF Regulations’), ‘VCFs’ registered under the erstwhile SEBI (VCF) Regulations, 1996 (‘VCF Regulations’) and their investors to deal with unliquidated investments of their schemes beyond expiry of tenure of the investment.

The comment period ended on 2 February 2024.

To access the text of the consultation paper, please click here

Recently, SEBI issued a consultation paper on the following additional proposals pertaining to the framework for issuance of subordinate units - REITs and InvITs:

  • Specification of a ceiling on the extent of subordinate units that can be issued
  • Bringing uniformity in the nature of rights conferred on subordinate units, and
  • Dealing with changes in terms and conditions of the subordinate units post issuance

The comment period ended on 31 January 2024.

To access the text of the consultation paper, please click here

AIFs are required to submit quarterly reports to SEBI in the specified format with respect to the activities carried on by them. SEBI, on 1 January 2024, has amended the Quarterly Reporting format for AIFs.

To access the revised quarterly reporting format, please click here

February 2024

On 2 February 2024, SEBI issued the consultation paper on flexibility to category I and II AIFs to create encumbrance on their holding of equity in infrastructure sector investee companies to facilitate raising of debt by such investee companies (the consultation paper). Through the consultation paper, SEBI has proposed amendment to the SEBI (Alternative Investment Funds) Regulations, 2012 (AIF Regulations). Some of the key proposals include:

  • Category I and II AIFs may create encumbrance on the equity of an investee company, only for the purpose of borrowing by the said investee company (if the investee company is in the business of development, operation or management of projects in any of the infrastructure sub-sectors)
  • The duration of encumbrance on equity should not be greater than the residual tenure of the scheme of the AIF
  • AIFs should not create encumbrance on equity of foreign investee company

The comment period ended on 23 February 2024.

To access the text of the consultation paper, please click here

March 2024

Companies raising capital through public issues are required to file a Draft Red Herring Prospectus (DRHP) with the SEBI and stock exchange(s). The disclosures in DRHP are appropriately updated, in line with the observations highlighted by SEBI and stock exchange(s) and thereafter the Red Herring Prospectus (RHP) is filed by the companies.

SEBI, vide a draft circular dated 19 March 2024 has proposed that the disclosures made in DRHP and RHP of public issues should also be made available in Audiovisual (AV) format by the issuer companies. Further, the AV needs to be in bilingual version, i.e., English and Hindi and made available in public domain.

The comment period ended on 9 April 2024.

To access the text of the draft circular, please click here

April 2024

Currently, shares of a few listed ICs or IHCs are getting traded less frequently but at a price which is significantly lower than the book value disclosed by the listed entities in their last audited financial statements.

SEBI, vide a draft circular dated 19 April 2024, has proposed a framework for price discovery of shares of listed ICs and listed IHCs whose market price is at a significant discount as compared to book value.

The comment closed on 10 May 2024.

To access the text of the consultation paper, please click here

May 2024

In July 2023, SEBI introduced assurance requirements of BRSR Core at company level and for a company’s value chain in a phased manner beginning financial year 2023-24.

BRSR Core is a sub-set of the SEBI BRSR format consisting of set of Key Performance Indicators (KPIs)/metrics under nine ESG attributes. In May 2024, based on the recommendations of the expert committee established to review provisions to facilitate ease of doing business, SEBI issued a consultation paper to propose changes to provisions relating to requirements of BRSR and BRSR Core under LODR Regulations.

Some of the key proposals pertain to the following –

Value chain reporting:

  • A 'voluntary disclosure' approach has been proposed rather than a "comply or explain" approach for ESG disclosures for the value chain and its assurance.
  • There are two alternatives given in the consultation paper for determining a value chain partner. As an additional alternative, SEBI has proposed a cumulative threshold of 75 per cent of the listed entity's purchases or sales by value, in addition to the individual 2 per cent threshold for defining value chain partners.
  • For financial year 2024-25, voluntary disclosure of previous year numbers has been proposed as a part of first year of ESG disclosures for value chain.

Substituting the requirement of ‘Assurance’ with ‘Assessment’

The term ‘assurance’ has been replaced with the term ‘assessment’. Industry Standards Forum along with SEBI would develop assessment standards.

Accordingly:

  • Financial year 2023-24: Listed entities can choose to either undertake an 'assessment' or 'reasonable assurance' of BRSR Core disclosures.
  • Financial year 2024-25: Assurance requirement will be replaced with assessment of BRSR Core.

Green credit

SEBI has proposed to include disclosure of green credits as an additional leadership indicator of BRSR. The disclosure should provide details of the green credits generated by the company and by its value chain partners. The comment period ended on 12 June 2024.

To access the text of the exposure draft click here

On 23 May 2024, SEBI issued a consultation paper proposing certain modifications to the valuation framework for AIFs. The consultation paper provides relaxations on the following aspects:

  • Applicability of valuation methodology as per SEBI norms for listed and other than listed securities.
  • Certain changes in ‘valuation methodology and approach’ would not be construed as ‘material change’.
  • Eligibility criteria of AIF-appointed independent valuers.
  • Timeline for reporting investment portfolio valuation by AIFs to benchmarking agencies to be increased to 7 months.

The comment period ended on 13 June 2024.

To access the text of the exposure draft, please click here

On 9 May 2024, SEBI issued a consultation paper to promote ease of doing business for REITs and InvITs. The consultation paper is divided in the following two parts:

  • Part A – Proposals for both REITs and InvITs
  • Part B – Proposals for InvITs only

The comment period ended on 30 May 2024.

To access the text of the exposure draft click here click here

With an aim to reduce compliance costs and remove inconsistency among various requirements related to issuance of non-convertible securities, SEBI issued a consultation paper on 9 May 2024 to promote ease of doing business for issuers of non-convertible securities. This consultation paper includes proposals which mainly relate to disclosures in offer documents by issuers of non-convertible securities.

Few of the key proposals include:

  • Aligning disclosure requirements pertaining to project cost and means of financing with that included in offer document of equity
  • No disclosure requirements of PAN and personal address of promoters
  • Align the period for disclosure of key operational and financial parameters with the period for disclosure of financial information
  • Provide QR code and web-link of branches or units of issuer
  • Relaxation in disclosure requirements in case of purchase or acquisition of immoveable property in the offer document
  • Flexibility in signatories for providing attestation in offer document
  • Modification in timeline for submission of status regarding payment obligations to the stock exchanges by entities that have listed commercial paper

The comment period ended on 30 May 2024.

To access the text of the exposure draft click here

June 2024

On 26 June 2024, SEBI issued a Consultation Paper (CP) proposing amendments to certain SEBI Regulations. These proposals have been issued with an aim to facilitate ease of doing business and harmonise the provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (LODR Regulations) and SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 (ICDR Regulations). The CP is divided in the following three parts:

  • Part A : Proposals under the LODR Regulations
  • Part B : Proposals under the ICDR Regulations
  • Part C : Proposals for harmonizing the regulations under the LODR Regulations and ICDR Regulations.

Some of the key proposals are as follows:

Part A : Proposals under the LODR Regulations
I. Related party transactions

Exemptions to the definition of related party transaction (Regulation 2(1)(zc)): Following items have been proposed to be exempt from the definition of RPT:

  • Corporate actions by the subsidiaries of the listed entity and the subsidiaries of listed entities
  • Savings accounts and current account transactions in case of banking companies
  • Routine transactions at arm’s length pricing may be exempted from the related party norms, provided such transactions are in the ordinary course of business.

Approval of RPTs by the audit committee of the listed entity (Regulation 23(2)): As per existing regulations, prior approval of the audit committee of the listed entity is required for all RPTs to which the listed entity is a party. It has been proposed to exclude from the purview of RPTs the remuneration to Directors and Key Managerial Personnel (KMP), except those KMP who are part of the promoter/promoter group. Further, it is proposed to permit ratification of transactions which exceed the omnibus approval limit, within a specified timeline.

Omnibus approval (Regulation 23(3)): RPTs of subsidiaries can now obtain omnibus approval of the audit committee of the holding listed company.

II. Filings and disclosures

Single filing system (Regulation 10): A system that automatically disseminates the filing done on one stock exchange to the other stock exchanges using an API-based integration has been proposed.

Periodic filings (Regulation 10B): To minimize the number of periodic filings that are required to done by a listed entity, it is recommended to merge the periodic filings under the LODR Regulations into two broad categories:

  • Integrated Filing (Governance) – comprising of corporate governance report, statement on redressal on investor grievance. The timeline for Integrated Filing (Governance) should be within 30 days from the end of the quarter.
  • Integrated Filing (Financial) – comprising of financial results, statement of deviation in use of proceeds, related party transactions etc. The timeline for Integrated Filing (Financial) should be within 45 days (60 days for the last quarter) from the end of the quarter.

System driven disclosures of certain filings (Regulation 31 and Para A of Part A of Schedule III of the LODR Regulations) : The process of disclosure of shareholding pattern and new or revised credit ratings should eventually be completely automated.

Website links (Regulation 46(2)): The information/data provided by listed entities is hosted on the website of stock exchanges. It has been proposed to provide curated links to the information/data on their own websites instead of duplicating the whole data again.

Newspaper advertisements (Regulation 47): The requirement of publishing detailed advertisements in newspapers for financial results is proposed to be made optional for listed entities. Further, it has been proposed to provide a small section with details of QR code and weblink of the page where detailed financial results of the listed entity have been put up.

III. Disclosure of material events

Additional timeline for disclosure of events in some cases:

  • For the disclosure of outcome of the board meeting that concludes after close of trading hours an increased timeline of three hours instead of 30 minutes has been proposed under regulation 30(6) and Para A of Part A of Schedule III of the LODR Regulations.
  • In case of litigations or disputes wherein claims are made against the listed entity, an increased timeline for disclosure to 72 hours has been proposed from the existing 24 hours under Para B of of Part A of Schedule III of the LODR Regulations

Acquisitions by listed entities (Para A of Part A of Schedule III of the LODR Regulations): It is proposed that a listed entity should disclose details of acquisition made by the listed entity, whether directly or indirectly, where such a listed entity holds shares or voting rights in a company, whether listed or unlisted, aggregating to 20 per cent (increased from 5 per cent at present) or there has been any subsequent change in holding in the company exceeding 5 per cent (increased from 2 per cent at present). However, acquisition of shares or voting rights in an unlisted company, aggregating to 5 per cent or any subsequent change in holding exceeding 2 per cent, shall be disclosed in the specified format on a quarterly basis as part of the Integrated Filing (Governance) as described in point II above.

Disclosure of tax litigations and disputes (Para B of Part A of Schedule III of the LODR Regulations): It is proposed that a listed entity should disclose tax litigations / disputes including tax penalties based on application of criteria for materiality. It has been proposed that a listed entity should provide:

  • Disclosure of new tax litigations or disputes within 24 hours
  • Quarterly updates, as part of the Integrated Filing (Governance), on existing tax litigations or dispute
  • Tax litigations or disputes, the outcomes of which are likely to have a high correlation, should be cumulated for determining materiality.
IV. Board of directors and its committees

Vacancies in board committees (Regulation 17(1E)): The existing regulations provide no specific timeline to fill up vacancies in Board Committees arising as a result of vacancy in the office of a director. In order to provide adequate time to listed entities, a timeline of three months has been proposed to fill up vacancies in Board Committees, which result in non-compliance with the composition prescribed under specified regulations.

Timeline for obtaining shareholders’ approval for appointment/re-appointment of director (Regulation 17(1C)): As per regulation 17(1C) of the LODR Regulations, approval of shareholders for any person appointed on the board of a listed entity should be taken within a period of 3 months or the next general meeting, whichever is earlier. It has been proposed to exclude the time taken for regulatory or statutory or government approvals for appointment or reappointment of a person as a director for determining the time limit under regulation 17(1C) of the LODR Regulations.

V. Promoters and controlling shareholders.

Framework for reclassification of promoter/promoter group entities (Regulation 31A): Regulation 31A of the LODR Regulations lays down the procedure to be followed for reclassification of an entity belonging to promoter or promoter group as a public shareholder. The consultation paper has proposed changes to the framework for reclassification of promoter or promoter group entities as public under the LODR Regulations.

Obligation for disclosure of information to the listed (Regulation 5): Under the existing regulation there is no specific obligation on promoter(s), directors, KMP to make specified disclosures to the listed entity. The report proposes to cast obligation on the promoters, directors and KMPs to disclose all information that is relevant and necessary for the listed entity to ensure compliance with applicable laws.

VI. Other compliance matters requirements

Annual reports (Regulation 36(2)): The requirement of sending physical copies of annual reports to shareholders whose email ids are not available has been proposed to be removed. Such shareholders should be sent a letter with a link from which the annual report can be downloaded. Annual reports need to be submitted to the stock exchange on or before commencement of its dispatch to the shareholders.

Subsidiary related compliance requirements (Regulation 24(6)): The requirement of shareholders’ approval under regulation 24(6) for sale, disposal or lease of assets of a material subsidiary has been proposed to be removed in case such a transaction takes place between two wholly owned subsidiaries of the listed entity.

Corporate governance at listed entities (Part E of Schedule II of the LODR Regulations): The board has proposed to extend the applicability of the following provisions to the top 2000 listed entities:

  • Appointment of one woman independent director on the board
  • Constitution of a risk management committee
  • Mandating more annual meetings of independent directors

Currently, the above mentioned provisions are applicable to the top 1,000 listed entities.

Virtual and hybrid shareholder meetings (Regulation 44(4)): It is proposed to hold permanent virtual and hybrid general meetings, with the notice period for such meetings reduced from 21 days to seven days. Further it has been proposed to remove the requirement of proxy forms for general meetings.

Part B : Proposals under the ICDR Regulations
Eligibility conditions of an IPO (Regulation 5) The consultation paper provides flexibility under eligibility conditions for an IPO by allowing issuers with outstanding Stock appreciation rights (SARs) to file DRHP where such SARs are granted to employees only and are fully exercised for equity shares prior to the filing of the RHP.
II. Public announcement after filling of draft offer document (Regulation 26) It has been proposed to change the requirement of issuing advertisement post filing of Draft Red Herring Prospectus (DRHP) from two days to two working days. Further the 21 day comment period should be calculated from date of advertisement and not the date of filing.
III. Pre-IPO transactions (Regulation 54) It has been recommended to disclose details of pre-IPO transactions after filing of DRHP to the stock exchanges.
III. Part C : Proposals to harmonise regulations under the LODR Regulations and ICDR Regulations
I. Definition of material subsidiary thresholds The financial line items for identification of a material subsidiary under the ICDR and the LODR Regulations are different. It is proposed that the terminology for identification of a material subsidiary under both the regulations should be aligned and both regulations should refer to consolidated ‘turnover’ instead of ‘income’.
Disclosure of material agreements in offer documents The requirement of disclosure of material agreements in offer documents that are entered into by shareholders, promoters, directors, etc. should be aligned under both the regulations in order to ensure parity in disclosures of material agreements.

To access the text of the consultation paper please click here

In order to provide investors with relevant and periodic information, AMCs make various mandatory and voluntary disclosures to SEBI and the trustees. This includes scheme annual report, half yearly financial results, Scheme Information Document (SID), Key Information Memorandum (KIM), investor account statements, etc.

The RAR represents a realistic measure of scheme’s performance as it quantifies the amount of return generated by a mutual fund scheme for each unit of risk taken to achieve that return.

However, the extant regulatory framework does not mandate disclosure of RAR along with the returns of a mutual fund scheme.

In this regard, on 28 June 2024, SEBI issued a consultation paper proposing disclosure of RAR of the portfolio of a mutual fund scheme proposing, inter alia, the following:

  • Disclosure of Information Ration (IR) as a measure for disclosure of RAR along with the scheme’s performance
  • Methodology for calculation of IR for each category of mutual fund.

To access the text of the consultation paper please click click here

July 2024

A passively managed mutual fund seeks to mirror the performance of an index such as ETFs and index funds where portfolios of index funds can be easily tracked. Even though both active and passive MF schemes are covered under the purview of the current MF Regulations24 The SEBI (Mutual Funds) Regulations, 1996 (MF Regulations) and the current regulatory framework for MFs inter-alia provide for regulation of MFs and the schemes managed thereunder. , the provisions thereunder have been envisaged, primarily keeping in mind the actively managed schemes and the risks and complexities associated therewith. In this regard, SEBI has proposed a relaxed framework (MF Lite Regulations) for passive MF schemes. The proposed framework consists of the following sections: The SEBI (Mutual Funds) Regulations, 1996 (MF Regulations) and the current regulatory framework for MFs inter-alia provide for regulation of MFs and the schemes managed thereunder.

  • Ease of entry and relaxed provisions for MFs intending to launch only passive schemes under MF Lite registration.
    (Section I)
  • Ease of compliance, relaxed disclosures and other regulatory requirements for passive schemes under existing MFs as well as schemes that may be launched under the MF Lite registration. (Section II)

The comment period for this proposal ended on 22 July 2024.

To access the text of the consultation paper please click here

With an aim to expand the regulatory scope of PIT regulations, it has been proposed to rationalise the following terms as follows:

Connected person: The definition of ‘connected person’ under PIT Regulations is proposed to include persons deemed to be connected to the reporting entity by virtue of their proximity with connected persons25 Owing to their close relationship with connected persons, such deemed connected persons are considered to be in a position where they can potentially indulge in insider trading. . While defining such deemed connected persons, reference would be drawn from the definition of ‘related party’ under the Companies Act, 2013 and on SEBI’s experience

  • Relative: The definition of ‘relative’ would be rationalised under PIT Regulations for the purpose of establishing insider trading. For this purpose, reference would be drawn from the definition of ‘relative’ under the Income Tax Act, 1961.
  • Immediate relative: The definition of ‘immediate relative’ is proposed to be retained under the PIT Regulations. However, subsequent to the proposed changes to PIT Regulations, the relevance of the term ‘immediate relative’ would be limited to disclosures and Code of Conduct under PIT Regulations.

The comment period for this proposal ended on 18 August 2024.

To access the text of the consultation paper please click here

August 2024

This consultation paper seeks comments from public on the following proposals related to ease of doing business for non-convertible securities:

  • Alignment of regulations governing approval and authentication of financial results for entities having listed non-convertible securities with that for equity listed entities.
  • Alignment of regulations governing disclosure of fraud /default in respect of price sensitive information for entities having listed non-convertible securities with that of equity listed entities under Schedule III of the LODR Regulations.
  • Reduction in timeline for intimation of record date to Stock Exchanges by entity having listed non-convertible securities to ‘atleast three working days’ from ‘atleast seven working days’
  • Filing of all disclosures by listed entity (having listed non-convertible securities) with Stock Exchanges to be in XBRL format in line with regulations specified for equity listed entities
  • In order to encourage issuers to list their grandfathered outstanding unlisted ISINs, unlisted ISINs outstanding as on 31 December 2023 are exempt from restrictions with respect to maturity.

The consultation on this paper ended on 6 September 2024.

To access the text of this consultation paper, please click here. click here

Building on the recent feedback and developments on the Environment, Social and Governance (ESG) front, SEBI proposed to provide for a framework for social bonds, sustainable bonds and sustainability linked bonds in addition to the existing Green Debt Securities. These securities would together be referred to as ESG debt securities. Further, it has been proposed to introduce the concept of sustainable securitised debt instruments.

The consultation on this paper ended on 6 September 2024

To access the text of this consultation paper, please click here

The Consultation paper has made proposals to bring in uniformity in timelines for credit and trading of bonus shares from the record date, ensuring bonus issue is implemented in a timely manner.

Accordingly, to facilitate fast credit and trading of shares allotted pursuant to bonus issue and to reduce investors’ risk of market volatility due to any delay in credit of bonus shares, it is proposed to streamline and reduce timelines of bonus issue enabling T+2 trading of shares post record date (T day).

The consultation on this paper ended on 26 August 2024.

To access the text of the consultation paper, please click here

Regulation 13(1) of the FVCI Regulations, 2000 (FVCI regulations) require FVCIs to provide quarterly reports with respect to their venture capital activities to SEBI in a prescribed format.

Recently SEBI has approved amendments to FVCI regulations which will be notified in due course. In this context, a need for revising the format for filing of compliance report by FVCI has been felt.

This consultation paper has proposed the revised format for FVCIs.

The consultation on this paper ended on 29 August 2024.

To access the text of the consultation paper, please click here

One of the factors that drives investor participation in a market is the availability of liquidity. Low levels of secondary market transactions in corporate bonds has resulted in the corporate bond market being perceived as illiquid.

To address the issue of liquidity for investors, SEBI has proposed to establish a framework of providing a Liquidity Window facility by the issuers through use of put options exercisable on pre-specified dates or intervals.

The consultation on this paper ended on 6 September 2024.

To access the text of the circular, please click here

Currently, entities that have a pecuniary relationship with an issuer of debt securities (issuer), amounting to lower of- two per cent of the issuer’s gross turnover (or total income) or INR50 lakh, during the current year or two immediately preceding financial years is restricted from being appointed as a Debenture Trustee (DT).

In this consultation paper, SEBI clarifies that remuneration payable to DTs should not be considered while assessing the pecuniary relationship.

It has further been proposed that henceforth, the issuer should disclose in the offer document the remuneration/revenue received by the DT from the issuer in respect of debenture trusteeship services as a percentage of the total remuneration/revenue received by DT from the said issuer in respect of all services (including services other than the debenture trusteeship services), over the last three financial years.

The consultation on this paper ended on 11 September 2024.

To access the text of this consultation paper, please click here

The key proposals in this consultation include the following:

Doing away with the current requirement of filing Draft Letter of Offer (DLoF) with SEBI for issuance of observations Rationalising the content of Letter of Offer (LoF) by reducing the current disclosures to contain some of the relevant information regarding the rights issue such as object of the issue, price, record date, entitlement ratio, etc. Reviewing the role of intermediaries involved in the rights issue Process Reducing the timelines involved in rights issue process Enabling allotment to selective investors in rights issue Laying down adequate checks and balances

The consultation on this paper ended on 10 September 2024.

To access the text of this consultation paper, please click here

The MB regulations have been proposed to be revised with the following, considering the changes in market dynamics and increased compaliance over the past three decades, and considering the critical role merchant bankers play in the primary market: Existing MB regulations need to be aligned with amendment in other SEBI Regulations and with the current ecosystem. The capital adequacy requirement and eligibility criteria of merchant bankers needs to be reviewed. Clarity on the activities that a merchant banker is permitted to undertake and ensure continuance of only serious players in securities market. Delete provisions which have become reductant and have outlived their utility. The consultation on this paper ended on 18 September 2024.

To access the text of this consultation paper, please click here

Currently, regulated entities of SEBI are mandated to communicate various types of information to numerous stakeholders. This enables a regular and timely disbursal of information to the relevant stakeholders. However, the record of such mandatory communication is required to be maintained only for a limited class of communication.

The legally verifiable record of mandatory communication would help in resolving various issues, such as resolving investor grievances, protecting the interest of investors, etc. Accordingly, it has been proposed that the regulated entities may be mandated to maintain the record of all such communication, which are mandated to be communicated under the respective governing regulations and the circulars issued thereunder.

The consultation on this paper ended on 13 September 2024.

To access the text of this consultation paper, please click here

September 2024

This consultation paper seeks comments from public on the following proposals related to ease of doing business for Currently, the LODR Regulations permit companies to issue warrants or cheques for payment of dividends, interest, redemptions or repayments where electronic mode of payment is not possible.

However, considering the benefits of electronic payment and to bring the process of payment of dividend, interest, redemption or repayment to demat account holders at par with physical securityholders (for whom any form of payment is mandatorily required to be done through a digital mode), it has been proposed that any payment including dividend, interest or redemption or repayment by listed entities/RTAs10RTAs are Registrars to an issue and Share Transfer Agents be mandated to be made in electronic form only for demat account holders also.

The consultation on this paper ended on 11 October 2024.

To access the text of the consultation paper, please click here RTAs are Registrars to an issue and Share Transfer Agents

Currently, the PIT Regulations mandate closure of the trading window when the compliance officer of the company determines that the Designated Persons (DPs) can reasonably be expected to have possession of UPSI.

During the trading window closure, the DPs and their immediate relatives are prohibited from trading in the securities to which such UPSI relates, so as to prevent unfair gains due to information asymmetry.

SEBI has exempted certain transactions that meet prescribed criteria from the trading window restrictions- these inter alia include subscribing to Offer for Sale and Rights Entitlement. Considering that subscription to NCS is a pre decided event, and is regulated and subject to disclosure requirements/shareholder approval under the respective regulations, it has been proposed to exempt subscription to NCS from the trading window restrictions. SEBI has also invited suggestions on other transactions that meet prescribed criteria that can be exempt from the trading window restrictions. The consultation on this paper ends on 17 October 2024.

To access the text of the consultation paper, please click here

SEBI vide this consultation paper has proposed the following:

Half-yearly disclosures: The disclosure of expenses, expense ratio, returns and yields of all regular plans and direct plans should be disclosed separately in a standard format

Risk-o-meter: To enhance the pictorial representation of risk, it has been proposed to colour code the risk-o-meter.

The consultation on this paper ends on 18 October 2024.

To access the text of the consultation paper, please click here

October 2024

The main objective of this consultation paper is to ensure that funds collected during NFOs are deployed promptly and in accordance with the asset allocation specified in the Scheme Information Document (SID). The key proposals are: AMCs may be mandated to deploy the funds garnered in NFO within 60 business days from the date of allotment of units. In exceptional cases, the Investment Committee may extend the timeline by 30 business days
If the AMC fails to deploy the funds within the specified timelines, they may face certain consequences, such as:

  • They may not be permitted to launch any new scheme till the time the funds are deployed as per the asset allocation mentioned in the SID.
  • not be permitted to levy exit load, if any, on the investors exiting such scheme(s) after 60 business days of not complying with the asset allocation of the scheme.
  • report the deviation to Trustees at each of the above stages.

The above provisions may be made applicable to all NFOs other than for Index Fund and Exchange Traded Funds. Public comments on this consultation paper closed on 20 November 2024.

To access the text of the consultation paper, please click here

The objective of this consultation paper is to seek comments on the proposal to reduce the number of days from 21 working days to 5 working days for which the draft Scheme Information Documents (SIDs) submitted by Asset Management Companies (AMCs) are to be made available on SEBI website.

The comments on the consultation paper closed on 20 November 2024.

To access the text click here

The key proposals in this consultation paper are:
Requirement of sharing draft ESG rating report with the issuer in case of ERPs following a subscriber-pays model. Dealing with appeal and representation by the rated issuer in case of ERPs following a subscriber-pays model. Dispensing with the requirement to disclose the ESG ratings to the stock exchange(s) where the issuer or the security is listed, in case of ERPs following a subscriber-pays model. Specifying Activity Based Regulation for ERPs.

Comments on this consultation paper closed on 15 November 2024.

To access the text click here

The key proposals in this consultation paper are as follows:

  • Introduction of a separate chapter for corporate governance norms in the LODR Regulations which will be applicable only to HVDLEs;
  • Relaxation in the threshold for identification of HVDLEs for applicability of Corporate Governance Norms;
  • Introduction of the sunset clause for applicability of Corporate Governance norms;
  • Relaxation for HVDLEs which are not companies as per the Companies Act, 2013;
  • Relaxation with regard to constitution of the Nomination and remuneration committee (NRC), Risk Management Committee (RMC) and Stakeholders Relationship Committee (SRC);
  • Introduction of filing of corporate governance compliance report in XBRL format and harmonization of reporting formats with that specified for equity listed entities;
  • Introduction of Business Responsibility and Sustainability Report (BRSR) for HVDLEs on a voluntary basis;
  • Requirements related to maximum number of directorships;
  • Requirements related to number of memberships or chairpersonships in the committees by a director; and
  • Requirements pertaining Related Party transactions (RPT);
November 2024

Securitisation5 Securitisation is a process in which assets/ receivables are pooled together and then re-packaged into pass through instruments. The cash flow from these underlying assets/ receivables is passed on to the purchasers/ investors in the pass-through instruments. in India is regulated and governed by SEBI via the SDI Regulations and by RBI via the provisions of Master Direction-RBI (Securitisation of Standard Assets) Directions, 2021 – for standard assets (RBI SSA Directions). Given the passage of time since the SDI Regulations were formulated and the availability of revised directions issued by RBI that can serve as a benchmark, a need was felt to update the SDI Regulations.

Various areas of proposed changes in the consultation paper are as follows:

  1. Amendments relating to form and nature of SDIs, ticket size, meaning of debt etc.
  2. Amendments relating to structural elements of the securitisation transaction.
  3. Amendments relating to trustees
  4. Amendments relating to disclosure requirements.
  5. Some clarificatory changes
  6. Revisions to legislative references
  7. Amendments to SEBI LODR

To access the text please click here

The SEBI consultation paper issued on November 9, 2024, proposes a review of the definition of UPSI under the SEBI (Prohibition of Insider Trading) Regulations, 2015 (PIT Regulations) to align the definition of UPSI with events listed in Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (LODR Regulations).

The events listed in Para A and B of Part A of Schedule III of LODR Regulations have been evaluated by the working group6 A working group was constituted to review the definition of UPSI in light of Para A and Para B of Part A of Schedule III read with Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. in order to identify those events and conditions that may potentially be price sensitive and have been recommended to be included in the definition of UPSI.

The comments on this consultation paper closed on 30 November 2024.

To access the text please click here

The SEBI consultation paper on the review of the Small and Medium Enterprise (SME) segment framework under SEBI (Issue of Capital and Disclosure Requirement) Regulations, 2018, (ICDR Regulations) and the applicability of corporate governance provisions under the LODR Regulations, aims to strengthen pre-listing and post-listing provisions for SMEs.

Some of the key changes proposed are:

  1. IPO process: Increase the minimum application size from INR1 lakh to INR2 lakh or INR4 lakh to protect the interest of smaller investors and to attract investors with greater risk taking appetite to enhance the overall credibility of SME segment.
  2. Allocation for Non-Institutional Investors (NIIs): Align SME IPO allocation with Main Board IPOs by introducing sub-categories in the NII category and a draw of lots for oversubscription.
  3. Allotment process: Increase the minimum number of allottees from 50 to 200 in an IPO to ensure broader investor participation.
  4. Offer for sale (OFS): Restrict OFS to 20% of the issue size to ensure funds are used for growth.
  5. Monitoring of issue proceeds: Lower the threshold triggering the appointment of a monitoring agency from INR100 crore to INR20 crore and mandate monitoring incase of specific objects like funding subsidiaries or repay loans or an acquisition.
  6. Lock-in period: Increase the lock-in period for promoters' contributions to 5 years and phase the release of excess holdings to ensure promoters continue to have some skin in the game until company is on the SME exchange.
  7. General corporate purposes (GCP): Limit GCP to 10% instead of 25% of the issue size or INR10 crore, whichever is lower.
  8. Eligibility Criteria for SME IPOs: Introduce a 2-year cooling-off period for companies formed from LLPs or partnerships and for those with a change in promoters before filing the draft offer document. Require a minimum issue size of INR10 crore and operating profit of INR3 crore for at least two out of three preceding financial years.
  9. Migration to Main Board: Allow SMEs to raise funds without migrating to the Main Board if they comply with Main Board corporate governance and disclosure norms when their post-issue paid-up capital exceeds INR25 crore.

Corporate governance: Extend LODR provisions pertaining to related party transactions, disclosure of board composition and meetings and periodic filings to SME listed entities.

Comments on this paper closed on 4 December 2024.

To access the text please click here click here

This paper aims to seek views from public on the need for channelizing capital from Angel investor pools through a regulated structure. If the need for a regulatory environment for Angel Funds is acknowledged, paper also aims to seek views on proposals to streamline regulatory framework for Angel Funds to:

  • Rationalize their fundraising processes,
  • Strengthen disclosure and governance requirements, and
  • Provide operational clarity and investment flexibility.

These proposals aim to, inter-alia, restrict Angel Funds to investors with commensurate risk appetite and ability to evaluate investment proposals, while also enhancing the ease of doing business in this space

Consultation on this paper closed on 28 November 2024

To access the text please click here

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