Regulatory updates

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