Regulatory updates

Effective 1 April 2022 and 1 April 2023

On 9 November 2021, SEBI notified amendments to the Listing regulations on related parties and Related Party Transactions (RPTs) vide SEBI (Listing Obligations and Disclosure Requirement) (Sixth Amendment) Regulations, 2021. Subsequently, on 22 November 2021 and 7 January 2022 , SEBI issued a circular specifying the disclosure obligations of listed entities (including HVDLEs) with respect to RPTs. The amendments mainly pertain to:

• Revising the definition of related parties and RPTs
• Audit committee’s approval mechanism for RPTs and information to provided to audit committees
• Materiality threshold and shareholder’s approval for RPT
• Enhanced disclosures, including revised format prescribed for submitting RPTs to stock exchanges on a six-monthly basis

Certain amendments will be effective 1 April 2023, and others will be effective 1 April 2022.

Voluntary for FY 21-22 and mandatory from FY 22-23

On 10 May 2021, SEBI notified the Business Responsibility and Sustainable Reporting (BRSR) provisions which is applicable to top 1,000 listed entities based on market capitalisation.

As per the notification, top 1,000 listed entities by market capitalisation may voluntarily report on BRSR (in place of the extant Business Responsibility Report (BRR)) as part of their annual report for financial years 2021-22. However, it would be mandatory to report on BRSR for financial year 2022-23 and onwards.

Mandatory from 1 April 2023

On 7 September 2021, SEBI notified amendments to issuers of Non-Convertible securities. Most of the amendments pertaining to financial reporting and enhanced disclosures to stock exchanges, debenture trustees and on the website were applicable on an immediate basis.

However, corporate governance provisions for High Value Debt Listed Entities (HVDLEs) are applicable on a ‘comply or explain basis’ up to 31 March 2023, and on a mandatory basis with effect from 1 April 2023.

Effective 1 April 2023

On 25 January 2022, SEBI vide a notification issued the SEBI (Mutual Funds) (Amendment) Regulations, 2022. As per this notification, the financial statements and accounts of mutual fund schemes will be prepared in accordance with Indian Accounting Standards (Ind AS). In case of conflict between Ind AS and the MF Regulations, requirements specified under the mutual fund regulations should be followed by asset management companies. Additionally, SEBI vide a circular dated 4 February 2022 mandated certain guidelines on accounting with respect Ind AS for mutual funds (guidelines). The guidelines also provide specific formats of financial statements to be prepared for the mutual fund schemes under Ind AS. This circular is effective 1 April 2023.