Regulatory updates

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.

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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.

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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.

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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.

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To access the text of the exposure draft click here