CAIRR Update May 20, 2024

20/05/2024

Summary of the SEBI Notifications dated 17/05/2024.

These notifications are integrated in our free-to-use website ca2013.com.

 1.  SEBI vide notification dated 17/05/2024 has issued the LODR (Amendment) Regulations, 2024. 

The summary of this notification is as follows-

• The notification has laid down the manner of determining the market capitalization on the basis of which these regulations will now  be applicable to the listed entities. A system shall further be put in place for BRSR/ BRSR Core disclosures within the period specified in the said notification.
• The provisions of these regulations shall continue to apply to such an entity unless its ranking changes in the list prepared by the recognized stock exchange and such change results in the listed entity remaining outside the applicable threshold for a period of three consecutive years and for an entity, the provisions that apply on the basis of criteria of market capitalisation shall cease to apply at the end of the financial year following the 31st December of the third consecutive year. Provided the listed entities that follow January to December as its financial year, the provisions shall cease to apply at the end of three months from 31st December of the third consecutive year (i.e. on 31st March).
• The applicability of Regulation 15 and 16 to 27 to a ‘high value debt listed entity’ has now been extended to 31^st March 2025 which earlier was 31^st March 2024 and accordingly the entity shall endeavor to comply with the provisions and achieve full compliance by March 31, 2025. In case of non-compliance the entity till such time, the entity shall explain the reasons for such non-compliance/ partial compliance and the steps initiated to achieve full compliance in the quarterly compliance report.
• The composition of Board of Directors w.r.t. the presence of independent woman director on the board now stands amended. The requirement of at least 1 independent woman director applicable to top 500 listed entities has been omitted. Now only top 1000 listed entities shall have at least one independent woman director on their Board.
• Top 1000 listed entities are no longer required to have minimum 6 directors on their Board. The provision is now applicable to only top 2000 listed entities. Similarly, only the top 2000 listed entities are required to have 1/3^rd of its total strength or 3 directors, whichever is higher, including at least 1 independent director as quorum for every board meeting. The top 1000 listed entities are no longer mandated for such quorum in their board meetings.
• The gap between any two consecutive meetings of the risk management committee shall now not more than 210 days as opposed to 180 days, as stated earlier.

• Where the listed entity is required to obtain approval of a regulatory, government or statutory authorities for filling the vacancy in the office of a KMP, then such a vacancy shall be filled up not later than 6 months from the date of vacancy as opposed to the 3 months timeline.

• Fund raising, for which prior intimations are required to be provided, has been amended to further include the issue of securities (excluding security receipts, securitized debt instruments or money market instruments regulated by the Reserve Bank of India).

• An intimation for determination of issue price in a QIP is not required if such placement is done in accordance with the provisions of the SEBI (ICDR) Regulations, 2018.

• The prior intimation for considering financial results and any alteration in securities of a listed entity or in the date of interest payable on securities specified therein shall also need to be intimated at least two working days in advance, excluding the date of the intimation and date of the meeting as opposed to 5 days and 11 working days. The date of such Board meeting shall be mentioned therein.

• The top 250 listed entities will now also confirm, deny or clarify any event or information occurring due to a material price movement as may be specified by the stock exchanges as soon as reasonably possible but in any case, not later than 24 hours from trigger of such material price movement and not the reporting of any event or information.

• When the listed entity confirms within 24 hours from the trigger of material price movement, any reported event or information on which pricing norms provided under Chapter V or Chapter VI of the SEBI (ICDR) Regulations, 2018 or those provided under Reg 8 or Reg 9 of the SEBI (SAST), 2011 or those provided under Reg 19 or Reg 22B of the SEBI (Buy-back of Securities) Regulations, 2018 or any other pricing norms specified by the Board or the stock exchanges are applicable, then the effect on the price of the equity shares of the listed entity due to the material price movement and confirmation of the reported event or information may be excluded for calculation of the price for that transaction as per the framework as may be specified by the Board.

• The promoter, director, KMP or senior management of a listed entity are now liable to provide adequate, accurate and timely response to queries raised or explanation sought by the listed entity in order to ensure compliance with the requirements under Regulation 30 (11) and the listed entity shall disseminate the response received from such individual(s) promptly to the stock exchanges.