The Securities and Exchange Board of India (SEBI) has introduced significant changes to disclosure requirements for listed companies, offering much-needed relief and simplifying compliance rules. The regulatory body has relaxed certain deadlines and made adjustments to the criteria for reporting fines and penalties. These changes are expected to ease the compliance burden on companies and promote better business operations.
Key Changes in Disclosure Regulations
SEBI made several important announcements following its board meeting on September 30. These updates are part of the broader reforms aimed at simplifying the listing regulations, making business easier for companies already listed or planning to go public.
Previously, companies had to report all fines, litigation, and penalties to stock exchanges within 24 hours. However, SEBI has now raised the threshold, allowing companies to disclose fines and penalties only if they exceed Rs 1 lakh. This limit is applicable for penalties imposed by regulatory bodies or enforcement agencies. For fines related to non-compliance with SEBI rules, the threshold is Rs 10 lakh. This move aims to reduce the administrative burden of reporting smaller penalties and focus on more material disclosures.
Extended Timelines for Board Meeting Disclosures
SEBI has also extended the timeline for companies to disclose the outcomes of board meetings. For board meetings that conclude after market hours, companies now have up to three additional hours to report key decisions, up from the previous limit of 30 minutes. This change provides companies with more flexibility and reduces the pressure to immediately disclose complex decisions.
In the case of litigation or disputes, companies now have up to 72 hours to report significant events, compared to the earlier 24-hour deadline. This adjustment gives companies more time to analyze and report the situation comprehensively.
Simplified Filing Process for Listed Companies
To further streamline the reporting process, SEBI has introduced a unified filing system for listed companies. This system will allow companies to submit information to one exchange, and it will automatically reflect on other exchanges. This move will help reduce the duplication of filings and improve efficiency.
Additionally, SEBI has categorized periodic filings into two broader categories – Integrated Filing (Governance) and Integrated Filing (Financial), aiming to simplify the process and reduce the number of regular filings required from companies.
Relief for New Listings and Vacant Positions
For companies preparing to go public, SEBI has combined the pre-issue advertisement and price-band advertisement into a single ad. This includes the mandatory provision of a QR code for easy access to relevant information.
Moreover, listed companies now have an additional three months to fill vacant positions on their board committees. This extra time ensures smoother transitions and better governance.
In another positive move, SEBI has excluded board, committee, and key managerial positions from the Corporate Restructuring and Insolvency Processes (CRIP) under the Insolvency and Bankruptcy Code of 2016.
With these changes, SEBI aims to create a more flexible and business-friendly environment for listed companies, simplifying compliance and enhancing operational efficiency.
